Investing in “Magic” Cards
kotaku.com
kotaku.com
At the time, the collection was worth about $3000 -- it was revised and antiquities up to about Ice Age-era cards. I had, I think, 5 of the power nine cards and a full set of 4 of each dual land. It would probably worth close to $100k or more today if I sold everything at face value.
Even so, the return isn't that great, compared to other things you could have invested in:
Today an unlimited black lotus is about $4k. In 1995, it was about $300, if I remember correctly, maybe even a little bit less.
If you bought a black lotus in 1995, you'd have about a 1,300% return. If you had bought Hasbro stock instead, you'd have about 700% return.
if you had bought apple stock, you'd have had 12,000% return, and the market for stocks is a lot more liquid than the market for magic cards.
Considering the game is a huge money sink, it's very dangerous for anyone to see it as merely an investment. Those that do can make a LOT of money. There are some online exchanges doing very smart stuff (probably applying the same sort of stuff they do for stock trading).
I used to play, and sold all my cards cheaply (about 2010), after that older format tournaments exploded and my collection would be 20 times more expensive today.
I did do some very good purchases - I pre-purchased 8 copies of the Tarmogoyf card before launch for 2 dollars, then sold them years later for 200, and they would be worth 500 today.
Anecdotally, while most people I've met who played magic got into the game just like me, for fun, I knew one guy who dove head first and instead of buying enough cards to build a deck invested into having a good supply for sales and trading purposes, he used to make a good markup on them and eventually opened up his own shop, today is one of the game's biggest dealers and started dealing with magic cards around the mid 90s while only about 15, that is a good sign of being an entrepreneur in what was then a somewhat untapped market.
A realistic benchmark would be S&P500, and that would give you a 150% return.
A better comparison would be unopened packs of Magic cards vs the S&P. I don't know how that comes out though.
Of course, this presumes the seller has no way of determining the card content of an unopened pack, in which case the only packs that would remain unopened would have cards worth less than the expected value.
I don't think I could trust any seller to not somehow "peek" inside an apparently factory-sealed pack. I'd probably try a pinhole fiber-optic borescope, poke it through a not-very-noticeable spot, and try to identify the rare card, if I had any.
To give a counterexample, when I started playing Commander in 2011, Gaea's Cradle was $20. Today, only 6 years later, it's $270, a 1,350% return in less than a third the time.
There are countless more examples where I feel like an idiot for not buying cards sooner, thinking they were expensive at the time, and their value shot upward as the popularity of a new format (Commander) took off.
I've since stopped doing it because the hassle wasn't worth the relatively paltry profits from it (a couple hundred bucks a year). It was worth doing in college but not anymore. Also, having to hold onto physical inventory is annoying, especially if you move between acquisition and sale, which I did frequently.
My advice would be to not get involved unless you're going big and have the storage space to match. Then through economies of scale it can be worth your time ... if you don't mind spending lots of time managing eBay auctions or a site and packing/shipping things, anyway.
I made a decent amount of money off the MechWarrior collectible miniatures game back when I was still in high school. Well, I didn't "make" money, but I essentially got to play for free with a collection that was worth a couple thousand dollars, financed by making smart trades and selling miniatures that I wasn't using or had extras of. I spent a lot time selling stuff on eBay, wrapping packages and going to the post office; to this day most of my seller feedback # is still traceable to these activities. Of course, I was already spending hours a week playing this game in hobby shops and hours more participating in online forums.
I'd expect old Magic cards would not be difficult to forge, and would be very surprised if it didn't happen.
People forge art, they forge money, why not $27k Magic cards?
I played a lot of Magic, most of it between 2002-2007 when IME, the prices were starting to get way too high for me as I was still a teenager, nevertheless, for those willing to put an effort into negotiating you could make a decent change.
I saw several fake cards during that time, some of them were terrible, HP home printer cards you could see on the spot, most of them you could still see with just a careful check. IMO, you would get away easier if you forge the most used standard and modern cards, which often go over 30+ USD each and they can undergo a huge price hike if there's a high demand on major tournament registrations, people will not be as careful checking them.
edit: speak of the devil: https://www.youtube.com/watch?v=V7gajYmdUMw
The idea purported by these sellers is that these cards are not intended to be sold as the real thing - even the price they sell the cards at reflects that. They're meant to be used in place of the real thing in your own decks either because you cannot afford the actual card that it is replacing, you have a damaged copy of the card that it is replacing, or you refuse to pay hundreds or thousands of dollars for a piece of cardboard. Undoubtedly some unscrupulous people try to pass these as real, and there's a large subreddit and section of the proxy community that tries to prevent this - reporting eBay sellers and generally informing people that they exist.
[1] Example of Black Lotus's product - you can see the old dual lands and power 9 - https://www.youtube.com/watch?v=yozhleRg2SA
[2] Example of Villa Zheng's product - you can see that it's the same as Black Lotus and also contains the old dual lands and Power 9 as well: https://www.youtube.com/watch?v=NRINgS8R-7w
As long as M:TG stays popular, this sounds like a good investment. I wonder if M:TG will ever give in to their famous and controversial reprint policy (or print a functional equivalent or something).
https://en.wikipedia.org/wiki/Mt._Gox
https://magic.wizards.com/en/articles/archive/official-repri...
There will always be some type of antiques/historians market, but for the masses the next 20 years will have to be about playing magic style games through mobile devices and AR.
Seeing your card of a fire breathing dragon display in the real world and blow fire on your enemy is just too much WOW for the next generation to stay enthused about physical cards.
Not sure if the wow factor should matter that much, but definitely digital is way more convenient.
But if you are talking about the < 10 yr. old demographic that is vital for when most people START becoming players, it is huge. You have to have something really cool to show them to pull kids away from an XBOX or Nintendo Switch.
Also, as someone else mentioned, once digital effects become more commonplace, their "wow" factor gets diminished.
I like paper MTG because I sit in front of a computer for work ALL DAY LONG. It's a great device, but being able to interact with people in a room with my hands, for a few hours is a very nice reprieve.
The physical cards are still the main product because that's how people meet the game and it encourages in-person activity, they are not looking for the wow factor they are looking for community, same reason why board games are on the rise.
As a kid I definitely played a lot of Magic, and much more than I do now.
But when I was trying to put together a playgroup, no one was interested in something so complex, and I went to multiple nerd schools. Pokemon was played, and later Yu-Gi-Oh, but very little Magic. Across three different schools I managed to put together a group of about six kids who cared at all about it.
Meanwhile, going to any comic book store, or Friday Night Magic, there were dozens of people in their 20s and 30s. Usually even a dozen older than that. As kids we were always outnumbered.
As of last year, I started offloading my collection. It's been a good run, and I have had fun with the game, but the amount of product produced by Wizards of the Coast has increased dramatically along with the player base. I believe we are approaching a glut and the supply/demand curve is beginning to swing the other way.
trading has gotten way more formal and less fun now. also they print way too many garbage cards that are worth nothing. the first few sets they couldn't keep up with demand, and those are the cards that are still pretty expensive.
now the sets are hit and miss. back in the day, i think stores and lack of supply and general usage of the internet kept rares in the couple of dollar range and up. now there are "bulk rares" that are like $.10 or so. or there are staple cards that are common that are $5 or more, and foil ultra rares that can be triple digits in price even in print, but those are the exception, not the rule.
still having some of the old cards and seeing the prices on the secondary market, my fear would be that some new Hasbro CEO could come in and just rescind the reserved list and basically just print money in the short term and rerelease the paper cards like they did online.
A thing they didn't mention much in the article, but Rudy talks a lot about, is he buys tons of unopened boxes from older sets and just holds them then slowly follows prices on ebay and the like and sells off boxes here and there. Don't consider Rudy some kind of scrappy fighter, as he is definitely a big dog in this game.
I didn't end up doing anything after watching his videos, because as someone below already mentioned, there is a huge cost in storing them and reselling them, then also hoping WOTC doesn't reprint the cards you were holding onto. All of this kinda makes it not worth the effort for what amounts to maybe +$20 in profit per box after keeping them for 2 years. Maybe that sounds good to someone else, but I am space-sensitive (I live in San Francisco).
I heard about Rudy right nearly when he started making videos 1.5 years ago (due to watching some mtg summaries, his channel was recommended to me by youtube), and if you had started then, _maybe_ it would be worth it. now that this article has been published I think the cat's out of the bag and you're going to see a large number of people trying to buy up mtg boxes/cards. Mostly though I'm worried that once WOTC gets a bigger whiff that there's this demand, they'll go the way of sports card producers and comic book makers of the 90s. Create more product than there is demand and cause the markets to crash.
Weeell, that's not strictly true. Anyone can "play with a Black Lotus"- just not in a sanctioned game. There is nothing Wizards (or anyone, really) can do to stop you from printing out copies of any M:tG card you wish and play with it against your friends, with similarly copied cards. The only requirement is that your opponents agree to it.
In fact, the practice is quite common among competitive players, common enough to have a name: the practice of copying the cards is called "proxying", the copies themselves "proxies". In the case of competitive players, they are useful because one needs to practice with a deck even when they don't have the necessary cards at hand (competitive players will often borrow their cards from friends, or even trade in the last minute, just before a tournament). On the other hand, although this is completely a guess, my hunch is that casual players would be much more averse to accepting proxies in their game, than competitive players are.
I digress. My point is that perhaps it's not just Wizards' promise to not reprint the cards on the reserved list that is keeping their prices high (and rising), it's also the willingness of the M:tG playerbase to embrace organised play, in the way it's provided as a service by Wizards. Players buy cards, yes, but they also buy a whole set of social conventions regarding their use, including the rules of the game (nothing stopping you and your friends for making up your own rules...) and the rules of Organised Play.
I guess I'd go as far as to say that what's important to the players is not really the physical cards themselves -the Power Nine and so on- but the opportunity to take part in more or less organised events, with clearly defined rules, enforced by an impartial authority (who happens to be the same people who sell the game).
In that sense, the cards will only ever go out of fashion when the game itself does- and that will happen when Wizards is no longer able to support it financially.