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2021-06-09 17:39:42I have been playing and collecting magic for some time. I have seen the rise and fall of many cards over the years, but with the pandemic, a lot of the cards have jumped up quite a bit. This overall isn't healthy for the game, but it is if you are looking for value. The question I have is this: When the world gets back to normal, will there be a market correction on the price of the cards, or will these prices stabilize and become the new normal?
2021-06-09 19:15:21
I expect there will be a market correction, but it will be very slow in both starting and progressing. All bets are off, however, if the US economy doesn't rebound well from the year of COVID and its government's propensity towards gridlock.
114 (100%)History lesson time.
Once upon a time, there was an industry where the powers that be caught on to the idea that there was money to be made by printing special editions of things.
Foils. Collector versions. Lots of versions of the same item. Premiums. Prices rose across the board, and normal versions of the same item actually started to become harder to find with the passage of time. Casual fans started to get crowded out by speculators over the next big shiny thing.
The problem was, because everything was special, nothing was special. Being special became mundane, and the mundane became worthless...and thus, harder to find. Stores wanted to carry the pricier versions of the new products, after all. More money to be made. And as long as the prices could rise, the companies would profit. So why not? Why not line their pockets with the dollars and ride the rollercoaster for as long as it would rise?
That industry was called Comic Books.
And it CRASHED HARD.
Barring some kind of course correction, I anticipate a hard crash sometime in 2022. I expect Hasbro to sell WotC, because their demands of "always make more money this quarter than the previous one" will not only not be met, but won't even come close. I expect Magic to take a few years to really recover from that. In the interim, I expect a lot of people to sell their collections and get out of the game while the getting's good. I hope to be in a position where I have money to take advantage of the steep decline ahead of us.
History lesson time.
Once upon a time, there was an industry where the powers that be caught on to the idea that there was money to be made by printing special editions of things.
Foils. Collector versions. Lots of versions of the same item. Premiums. Prices rose across the board, and normal versions of the same item actually started to become harder to find with the passage of time. Casual fans started to get crowded out by speculators over the next big shiny thing.
The problem was, because everything was special, nothing was special. Being special became mundane, and the mundane became worthless...and thus, harder to find. Stores wanted to carry the pricier versions of the new products, after all. More money to be made. And as long as the prices could rise, the companies would profit. So why not? Why not line their pockets with the dollars and ride the rollercoaster for as long as it would rise?
That industry was called Comic Books.
And it CRASHED HARD.
Barring some kind of course correction, I anticipate a hard crash sometime in 2022. I expect Hasbro to sell WotC, because their demands of "always make more money this quarter than the previous one" will not only not be met, but won't even come close. I expect Magic to take a few years to really recover from that. In the interim, I expect a lot of people to sell their collections and get out of the game while the getting's good. I hope to be in a position where I have money to take advantage of the steep decline ahead of us.
Comic books isn’t a game played by millions of people around the world. Magic has also gotten much better regarding outreach for new players with things like Arena and now having it on smart phones/devices. Market will correct imo but it’s not a fair comparison to comic books.
Last edited by RC27 (2021-06-12 15:42:45)
2021-06-12 16:26:16History lesson time.
(...)
It's always wise to keep history lessons handy, and some of the things that happened with comic books (or sports cards) may work as cautionary tales in some cases. But we've seen this parallel drawn for many years now, and it's only fair to also include the critique to your argument, as usual. I agree with RC27 - it's not quite a valid comparison. Some reasons:
- As a game, Magic cards have bigger usability than comics.
- Additionally, synergies between cards keep happening. New cards and format reprints affect the value of previously printed cards. This does not happen with comics.
- The collectors segment in the comic books audience is arguably much larger (at least it certainly was in the 1990s) than the collectors segment in the Magic audience.
- The collapse of the comic books market had a lot to do with distributors and an artificially inflated demand. Not really the current scenario with Magic. Also, WotC became an internal division in Hasbro. The chances of Hasbro selling WotC are frankly remote.
So we'll see bullish-bearish cycles and corrections in the secondary market, yes. Perhaps we'll see a progressive transfer of value from paper Magic to Arena (although I wouldn't bet hard on that). But a major crash? I very much doubt it. At least not for the same reasons that crashed the comic books market.
Disclaimer: My opinion is not a result of wishful thinking. The perspective of my MtG collection losing a lot of its value does not really bother me, and I would also take the chance to buy some things if the prices crashed hard.
181 (100%)
Also, WotC became an internal division in Hasbro. The chances of Hasbro selling WotC are frankly remote.
I believe this would make it easier to sell off as its assets are not interwoven and its health is more separated from Hasbro as a whole and just is more attractive looking from the outside. I mean I could be wrong, but you see it a lot when a company breaks off a piece of their business then that piece of business is sold in the near future, even if it is not the initial intention.
Will they? I don't think it is in their immediate interests as WotC is their biggest money maker iirc, but if and when the bubble burst (as the ebb and flow of business would dictates it will burst) they will probably be more vulnerable to sale than if they were as they were before. I mean thus the old adage of buy low sell high would be in play if we are going to be perfectly honest. Remember that business is not dictated by doing the smart thing as we would easily be able to see, it is dictated by whether so old codger that sits at a long table gets and extra penny or not.
The US dollars changes might affect numbers. Stable International sales might be reported as more dollars. If the US market drop it does not means that price of the cards will go down as much because people will begin to order from outside the US. I was buying the booster box around 145$ canadian a year ago and I was able to preorder boxes for 125$ canadian for the D&D set so the money left will probably go to buy more cards. For the bubble to blow completly you need other countries to also go in trouble at the same time.
How much lgs will fold this year when programs to help them will finish might have a bigger impact. A lot of them have loans from the COVID that will need to be reimburse at some points. It might provide a source of sales lower than the price of the market so they can encounter their payments or liquidate.
I suspect that most of the big investors are in the US because it is easier for them to have insider information and know people that works at Wizards. Most of them will probably kept their cards if the bubble burst and stay the course because they did not reach that summit by panicking. If they have cashflow they might increase their buys to benefit from the lower price.
A lot of the investors that began collectings cards in the 90's will go to their retreat in around 10 years and will start reselling their collections slowly. This will be a factor that will contribute to the price of the cards in some years but not yet.
There is a lot of other factors that will impact the price this year so it is not as easy as saying that the US economy might go bad or that people might begin to spent their money outside of games now that they can go out.
Aklo wrote:Also, WotC became an internal division in Hasbro. The chances of Hasbro selling WotC are frankly remote.
I believe this would make it easier to sell off as its assets are not interwoven and its health is more separated from Hasbro as a whole and just is more attractive looking from the outside. I mean I could be wrong, but you see it a lot when a company breaks off a piece of their business then that piece of business is sold in the near future, even if it is not the initial intention.
Will they? I don't think it is in their immediate interests as WotC is their biggest money maker iirc, but if and when the bubble burst (as the ebb and flow of business would dictates it will burst) they will probably be more vulnerable to sale than if they were as they were before. I mean thus the old adage of buy low sell high would be in play if we are going to be perfectly honest. Remember that business is not dictated by doing the smart thing as we would easily be able to see, it is dictated by whether so old codger that sits at a long table gets and extra penny or not.
WOTC was a Hasbro subsidiary (basically an owned but separate company) for decades but recently was integrated MORE into Hasbro as a division. So while there is still a lot of organizational separation for a division, it is much less than there had been previously. Reversing that and selling it off would be unlikely, but I dont think it makes it "remote" though. Wotc is one of the few bits of hasbro making money so as long as that remains the case THAT makes a sale a remote possibility.
Being a game does make it harder for the bubble to fully burst. Online play and sales also help insulate it from total collapse (neither were widespread for comics in the 90s).
