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Evidence Of Artificial Price Inflation In The MTG Secondary Marketplace

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Evidence Of Artificial Price Inflation In The MTG Secondary Marketplace

Post by Trollestia on Thu Aug 08, 2013 9:50 pm

So this thread will probably be of interest to exactly zero of you, so let me start with a topic at least three people in this forum have some familiarity with, even of only through listening to me bitch about it.
As I'm sure a lot of you know, the TF2 trading community is a shambles (that's a quote not a grammar mistake).
The prices for TF2 items are controlled exclusively by backpack.tf. If you attempt to trade an item for more than its listed price you get negative rep and are eventually blacklisted, meaning almost every "serious" trader will not even look at your offers.
This makes it impossible for prices to rise unless the items are limited edition. Likewise, a herd mentality is created in deciding prices, as prices are determined by group voting. It is very easy to become a reputable voter by simply reading the comments section. People will either say "good proof" or "bad proof", and if you vote with the comments, you will almost always vote with the group. Because you get awarded for agreeing with everybody, this means that the first opinion is the opinion that shapes the outcome of the price suggestion.
The because the first opinion will almost always be either a total dumbass or a reputable trader who polices the site, either way the votes always go with the people who stand to gain the most. I kind of went off on a tangent and left one of my points in a ditch by the side of the road. The point is, by controlling the marketplace, TF2 trading totally sucks.
Now on to Magic: The Gathering's secondary marketplace.
Wizards of the Coast does not control this market. They do unnecessarily cater to the secondary crowd, as I've mentioned before, but at least they do it in a way that makes them a lot of money, so it's not like they're being stupid by doing that.
An example of the secondary market being totally broken is the new set coming out, called From the Vault: Twenty. It features twenty cards that were instrumental in tournament decks over the 20 years of Magic. Each one of these cards is getting reprinted in a special Vault-only foil, and the box will cost 40 dollars.
The box contains two very very valuable cards: one card is Jace, the Mind Sculptor. This card is worth nearly 150 dollars, and that's not even foil. The other card is Venser, Shaper Savant. That card, nonfoil, is worth nearly 20 dollars. These two cards alone have prompted resalers across the country to mark the boxes up as much as 625 percent. For those of you bad at math, that means boxes are being sold for 250 dollars. Why? Because collectors would lose their collective (ha) shit if a super-valuable card could be purchased for 40 dollars, and foil at that.
But that's not the most ridiculous thing. That isn't artificial price inflation; stores wouldn't sell these boxes for such a ridiculous markup if they weren't capable of selling them. The bottled water industry is more bloated than that, and nobody even questions why they're being a cheap tube of plastic filled with water that they could have gotten from their sink. No, the real example of artificial price inflation comes from the cards Lifebane Zombie, Scavenging Ooze, and Fiendslayer Paladin.
tcgplayer.com, the site where most people buy their Magic cards, advertises some of the most popular cards from M14, the current core set in MTG. Let's look at their price ranges, starting in July (when the set was released).

Chandra, Pyromaster (midrange=21.95-12.83)


Kalonian Hydra (midrange=18.97-26.39)


Garruk, Caller of Beasts (midrange=19.95-21.99)


Archangel of thune (midrange=14.98-27.18)


Mutavault (midrange=15.02-16.00)


Scavenging Ooze (midrange=14.98-17.99)


Primeval Bounty (midrange=8.79-6.50)


Shadowborn Demon (midrange=6.10-6.00)


Jace, Memory Adept (midrange=10.94-6.30)


Fiendslayer Paladin (midrange=5.95-7.49)


Darksteel Forge (midrange=8.90-3.39)


Witchstalker (midrange=5.99-3.99)


Savage Summoning (midrange=3.99-2.47)


Lifebane Zombie (midrange=4.98-9.00)


These images all show the card's rise and fall over time. Now, you might notice that a lot of these cards have higher selling prices now than they did when they started. What's not obvious unless you go to tcgplayer.com yourself, however, is that all of the cards with a current selling price higher than what they went for during presale had a massive hype curve. A hype curve happens when people get excited for a card before it comes out. People really want the card before everybody has one so they start throwing their money at whoever offers to sell it to them. Then the card comes out and as supply increases but demand either stays the same or decreases, the card falls in value. Some cards have a natural rise and fall, and under normal circumstances there will be times when, while the card is still being printed, its price goes up a dollar or two higher than it was during its peak hype. Scavening Ooze, Fiendslayer Paladin, and Lifebane Zombie, however, did not have a hype curve. Lifebane Zombie was actually going down! Now, let's look at comments on tcgplayer.com about Lifebane Zombie.

July 12th, 2013 (price currently at 5.23 and falling)


July 19th (price currently at 4.99 and falling) (He does predict a price cap of 10 dollars. So far Lifebane Zombie is rising and is nearing that 10-dollar cap at an alarming rate.)


July 18th, (price currently at 4.98 and falling) (Found on the Archangel of Thune page.)


These people all predict a price rise that goes against both evidence and logic. In the last picture, you can see price predictions on Mutavault as well. Why are these people predicting such ridiculous price rises? Two people claim double the price, one person claims four times the price, and the card is falling in value and new copies are being printed every day! So why do they believe it will go up?
It's simple: because it's happened before. The people making these price predictions have been involved in MTG for a number of years and know that card values are controlled by a small group of collectors and tournament players who get these cards for their cheap price, and then jack the price up to make sure casual players can't just buy copies.
If you think this sounds crazy, read this article written by StarCityGames, a company infamous for its hand in the secondary MTG market.
http://www.starcitygames.com/magic/misc/18794_Insider_Trading_The_Cost_of_Cards_The_Rise_of_Magics_Popularity_Part_1_of_3.html
Or this thread where people discuss how StarCityGames sets prices at what they believe is fari.
http://forums.mtgsalvation.com/showthread.php?t=270853
Here's an article written by somebody who brings up the point that because of StarCityGames' influence, other retailers base their prices off of what STG says is fair instead of supply/demand.
http://reddening.wordpress.com/2010/07/09/starcity-price-predicting-why-be-accurate-when-you-can-be-in-control-or-do-it-yourself-guide-to-valuing-cards/
This is very similar to the TF2 market. Demand for an item and the amount of the item available doesn't control the price. The price is controlled by a numbered elite who sway decision-making processes in their favor, to ensure that they have the most valuable cards and rare, unmatched decks in the format. Scavening Ooze's price should not be rising; not only are more being printed and green is projected to be a weak color this Standard rotation, but Scavenging Oozes were given away as promos for people who bought a copy of Duels of the Planeswalkers: 2014 for iPhone, Android, and Steam. That promotion is actually still going on. That means this card not only is being opened in boosters, but is also being given away for simply buying a game for ten bucks. This card is also a reprint. There are more copies of this card floating around than there are of Lifebane Zombie and Fiendslayer Paladin combined. And yet, it's the most valuable of them all, coming in at nearly 20 dollars.
MTG suffers the opposite problem TF2 does. All TF2 items that can be found via drop or craft are falling and falling. These items will eventually be worth absolutely nothing due to constant mark downs and community shunning for trying to sell them for anything higher. The only way to sell these items is to sell them for under their estimated price value, which drives the prices lower and lower. Limited edition items are so few and far in between, with most being valued at far above a normal person's income devoted to a cartoonish FPS, that price hikes in valuable items aren't that important. However, in MTG, cards that are still being printed are being marked up and up to ensure somebody's collection stays valuable or somebody's carefully calculated Standard deck doesn't get copied by a beginner. The MTG secondary market is making the community an exclusive "dedicated hobbyists only" club, with no room for casual players. If this trend continues, programs like Cockatrice (a really shitty free online MTG game) will rise in popularity and will gain more support and dedication, and games like Duels of the Planeswalkers will also become more popular. It wouldn't surprise me if, in ten years, the physical card game is dead thanks to having a ridiculously high barrier of entry for new players.
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Re: Evidence Of Artificial Price Inflation In The MTG Secondary Marketplace

Post by Mr. Freeze on Thu Aug 08, 2013 10:21 pm

So, essentially, everything is getting fucked by the 1%? What do you propose we do about this?
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Re: Evidence Of Artificial Price Inflation In The MTG Secondary Marketplace

Post by Trollestia on Thu Aug 08, 2013 10:48 pm

One: We open a card shop and sell competitively and only sell sealed products at MSRP.
Two: We make our own online game and undermine the physical card game until it's no longer popular.
Three: We do one, and then two, and then be the one percent and screw everybody else and then laugh at everybody who thought they could have everything once they're left with nothing.
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Re: Evidence Of Artificial Price Inflation In The MTG Secondary Marketplace

Post by KENDARRR on Thu Aug 08, 2013 11:55 pm

Boy am I glad I don't play MTG.
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