Edit: Following a couple questions on Reddit I’ll explain at the very end what MTGO redemption is. Just scroll to the bottom then return here.
If you look through my history on this site and on Reddit, you’ll see I’ve been pretty solidly behind MTGO’s general direction over the last couple of years, with the exception of the redemption changes (which came bundled with a decrease in draft entry fees, but overall I feel this was net negative).
My opinions changed this week. I’d like to outline my fears, and the reason I’ve significantly downsized my MTGO collection.
I’m not totally panic selling and I’m keeping my decks, but I have sold off the collection of format staples I had accumulated over a few years, and converted them into complete Amonkhet sets, ready to redeem.
Goodbye my playset of almost everything from MM2; goodbye Ancestral Vision, Scapeshift, and all my spare VMA dual lands and spare Snapcasters. And hello to 40 sets of Amonkhet.
The Rishadan Port Price Collapse, and its implications
I posted a thread on Reddit about a month ago that, as far as I can tell, precipitated a price crash despite not starting a lot of conversation.
This crash was always going to happen, but my post seems to have spooked two or more dealers into getting into an undercutting war rather than sitting on their stock.
It turns out I was wrong. It’s not going to be 6 months for Port to be under 70, it will be 6 weeks. Four weeks after my prediction, it is buylisting at 73 (PRM version) and retailing at 80.5 tickets. (Prices taken from www.goatbots.com, an MTGO dealer I am not affiliated with but use as a priceguide and often buy from and sell to; there may be better deals available).
Now Port was always going to fall.
The card was ultra, ultra rare due to the nature of the Masques release, and ultra low supply cards with low demand are the most sensitive to crashing in price.
In MM2, the paper world experienced this with Daybreak Coronet while MTGO players saw Hurkyl’s Recall crash from $55 to $2.
When treasure chests were introduced there was serious panic that they would crash the value of older cards. I argued at the time that these fears were unfounded. But then two things changed.
First, there was the decision to aggressively pump the drop chance on some of the rarest cards online. Port, Wasteland – these cards had their drop rate more than double recently. As a result I expect a slow, steady decline (for the Wastelands and Force of Wills with high demand) and a rapid decline (for the likes of Port with low demand).
Secondly, there was the decision to award 1300 treasure chests per week – that’s nearly 6000 per month – in the format challenges.
This is a huge increase in supply, much more than I anticipated when I defended the introduction of Treasure Chests against criticisms from people saying ‘this will crash the value of my collection’.
I still don’t think the original chests would have crashed anything, but I do think the two changes combined mean that any non-redeemable MTGO collection is now a depreciating asset; much like a Standard staple approaching rotation like Gideon, Ally of Zendikar is.
This isn’t to say that a diversified Legacy collection on MTGO will crash in value next week, but I now project that it will trend downward over the medium term.
I own one multi-thousand dollar depreciating asset (my car), I don’t want to take the loss of owning a second one.
After a good deal of thought, I decided a couple weeks ago that if anything about MTGO’s future scared me, I would sell most of my valuable older cards and turn them into one of tickets, hard currency, or redeemable sets, and that I would downsize over time starting with selling off my extra VMA dual lands.
The Future of Redemption
And now we get to Announcement Week, and the mysterious announcement about digital Magic scheduled for Tuesday 13-Jun.
Redemption is a huge overhead for Wizards, but at the same time mass redemption (not players redeeming 4 sets for personal use, I’m instead talking paper MTG stores and e-stores redeeming 100 to 500 sets per month, every month) is the absolute pillar online cards derive value from.
This is the reason that MTGO dealers will pay you real life currency for bulk Event Tickets – they know they can trade to turn those tickets into redeemable sets, and sell those sets to paper MTG stores that are not affiliated with online dealers, acquiring real currency back from the store.
Wizards have made redemption worse on several occasions.
First they removed the ability to redeem sets released years and years ago (until about 2009 you could still redeem Invasion-era sets).
Then they upped the redemption fee from just postage, to $5 per set + postage, to $25 per set plus postage.
And most recently they severely restricted the redemption window, from ~24 months after a set releases to just ~6.
I’ve long feared that removing redemption was in WotC’s long term plans, I’ll go over why I recently began to fear it may be in the short term plans too.
Consider the timing of the ‘digital Magic’ announcement.
We all know that the Banned and Restricted announcement is the absolute most important piece of Magic news, especially when Standard could go many different ways.
Whatever the decision is – whether it’s a Marvel ban, no changes, an unbanning of Reflector Mage and/or Snugglecopter, some combination of the above, or something totally unexpected, the Standard B&R announcements will be the absolute centre of Magic discussion tomorrow. Discussion of other formats will be hot too.
Any other news released on the same day as the B&R announcement is going to be buried.
Political theorists have a term for releasing one piece of bad news strategically, in order to divert attention from another, more damaging piece of news. It is called a ‘Dead Cat strategy‘.
Wizards know this. Their decision to schedule “an announcement about digital Magic” on the same day as the B&R announcement may be harmless or even a mistake. But it may very well be that the B&R announcement is the dead cat being thrown on the table, in order to suppress discussion of redemption changes or redemption ending.
There’s just this circumstantial evidence that the announcement may be what I fear, nothing more than that. But if it is true, MTGO will go up in flames quickly. Every dealer will try to dump all their non-redeemable cards to turn them into redeemable sets, to get as much money out of the program as they possibly can.
As a form of insurance against this possibility, I’ve jumped the gun and actioned my plan to convert most of my collection into a few dozen Amonkhet sets.
After all, I insure my car, and I consider redemption ending tomorrow to be a more likely event than me needing to claim on my car insurance.
Two years ago I was confident that having a diversified collection on MTGO was fairly safe. Some cards would get reprinted and lose value, others would gain value, and ultimately I’d have real cashout equity if I wanted to quit the hobby, or needed money. Probably less than I paid to buy in, maybe more, but at least I’d get an appreciable fraction of my collection’s value back.
Six months ago, I still maintained that confidence while a number of other people were losing theirs.
As of the last week I have lost that confidence.
I’m no longer willing to have thousands of dollars tied up in MTGO cards. Hundreds of dollars (i.e. a deck or two) is fine, but thousands (i.e. enough staples to own the core of every deck in the format at once) is beyond my risk threshold.
I expect that dealers will have to increase their razor-thin margins on MTGO over the future if redemption remains uncertain. That will hurt me if I reverse today’s decision and buy back into a diversified collection again, but that’s a price I’m willing to pay to avoid carrying the risk of losing thousands.
If redemption does die, I’ll probably quit MTGO unless Wizards announce a realistic replacement system of providing cashout equity, perhaps something like the defunct Diablo 3 Real Money Auction House. Even then, I will assess any such development on its merits before deciding whether to quit or not.
Ultimately, Magic is too expensive to play if you don’t have cashout equity.
Edit: MTGO’s redemption program lets you swap a complete digital set for the corresponding paper cards in exchange for a modest fee.
For instance I (in Australia) can pay USD 255 and ‘surrender’ 9 Amonkhet sets on MTGO (so 9 of each mythic, each rare, each uncommon, common and basic land, all non-foil, PW deck cards not required) and Wizards will send, via FedEx courier, a box the size and shape of a booster case with 9 boxed up complete AKH sets. If my sets were foil online, they’d send foil paper sets instead.
Wizards declare a value of USD 75 per set whether normal or foil, and I’m required to pay any Australian government import taxes and goods and services tax (currently $0 on orders under AUD 1000, and 5% import duty + 10% GST + AUD 50 processing fee on orders from AUD 1000 to 9999, hence 9 sets). Your country may charge more or less.
In my experience redemption takes about 10 days but can only be initiated at downtime, which is only once or twice per month. (Wizards do not guarantee that speed).
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