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Thoughts on the Recent Buyouts: Another One
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9
Jul 27, 2016
The reserve list isn't going to change. It is more complex than changing names on a list.
If Wizards wanted to fix the issue of Legacy being cost prohibitive, they would just change the banned list for Legacy by adding the reserve list.
High second hand market prices are good for Wizards, the high prices for Legacy are a player problem. It is good for Wizards and not an issue for them. Players don't quickly leave a format/game when they have invested so much into it.
If Wizards wanted to fix the issue of Legacy being cost prohibitive, they would just change the banned list for Legacy by adding the reserve list.
High second hand market prices are good for Wizards, the high prices for Legacy are a player problem. It is good for Wizards and not an issue for them. Players don't quickly leave a format/game when they have invested so much into it.
Pinball
0
Jul 26, 2016
It's obviously a problem for play if someone completely corners the market on a card, but I believe that there is enough supply out there that this is going to be nearly impossible -- as Kevin said, a high price will attract sellers who were sitting on the card, and there's a limited number of serious players in the formats. The reserve list was initially created to stem the fear after Chronicles that all cards were at risk of reprinting, destroying the secondary market. In the over twenty years since then, the amount of value stored in these cards has drastically skyrocketed -- a $250 Black Lotus then might be a $10K Black Lotus now -- and any move to change the promise created by the reserve list would wipe out many businesses and collectors, driving away a huge portion of the community that supports the game. It is unfortunate that the opportunity exists for an investor with deep pockets to artificially manipulate scarcity, but I think the loss of faith in WOTC and the economic destruction that would be wrought on the MtG world by changing the reserve list is a greater risk to the continued health of the game than a temporary price increase in some cards.
ir1337
88
Jul 23, 2016
This is an exercise in the free market, monopolistic behavior, and in general supply/demand. Since the product is basically a non-necessity, and a group of buyers acted together to drive up the perceived value of a commodity, we can look at prior occurrences of this kind of act.
In early 1980 an attempt was made to corner the silver market by pair off Texan brothers with deep pockets. The pair used both money in the market and more extensively, buying on margin to gather nearly a third of the world supply of available silver. Margin buying is effectively buying on credit, since they were a known quantity, exchanges permitted them great levity to purchase with reckless abandon on margin. The troy ounce price of silver went from around 6 to around 45. This artificial price inflation served to allow them to mete out their silver stores slowly to reduce the price deflation that would occur if they dumped it all quickly (who was willing to buy that much silver at once...nobody but the Hunt brothers). Their play went badly quickly, because the extraordinary amount of money required when the margin calls (creditor calling in their debt) were issued essentially busted the Hunts and the silver price collapsed. Effectively, because they could not sell fast enough at a high enough price, the market adjusted and in four days the price dropped 50%. When they no longer owned enough value of silver to cover their margin, they took a heavy bath.
How to apply this to the mtg reserved list...those who paid heavily for their cards will perhaps keep the perceived value high for a short time, but as the market adjusts, buyers become sellers and supply is restored, the market value will drop. Ultimately the buyers may make some money on the deal. Craig and his troop created a stunning level of demand for a short time, but the market will always prevail.
From a play perspective...no one was side boarding silver bars into their decks in '80, so your guess is as good as mine. ;-)
In early 1980 an attempt was made to corner the silver market by pair off Texan brothers with deep pockets. The pair used both money in the market and more extensively, buying on margin to gather nearly a third of the world supply of available silver. Margin buying is effectively buying on credit, since they were a known quantity, exchanges permitted them great levity to purchase with reckless abandon on margin. The troy ounce price of silver went from around 6 to around 45. This artificial price inflation served to allow them to mete out their silver stores slowly to reduce the price deflation that would occur if they dumped it all quickly (who was willing to buy that much silver at once...nobody but the Hunt brothers). Their play went badly quickly, because the extraordinary amount of money required when the margin calls (creditor calling in their debt) were issued essentially busted the Hunts and the silver price collapsed. Effectively, because they could not sell fast enough at a high enough price, the market adjusted and in four days the price dropped 50%. When they no longer owned enough value of silver to cover their margin, they took a heavy bath.
How to apply this to the mtg reserved list...those who paid heavily for their cards will perhaps keep the perceived value high for a short time, but as the market adjusts, buyers become sellers and supply is restored, the market value will drop. Ultimately the buyers may make some money on the deal. Craig and his troop created a stunning level of demand for a short time, but the market will always prevail.
From a play perspective...no one was side boarding silver bars into their decks in '80, so your guess is as good as mine. ;-)
Kevin
5434
Outreach
Jul 22, 2016
I watched the Craig Berry facebook video about his buyout of Lion's Eye Diamond... he bought around 150 copies of the card for $127 each? I can't imagine that's nearly enough to 'corner the market' for the card... Sure, some desperate people will pay the inflated $200 prices for a very short period of time, but the high price will attract sellers and the price will come back down. Craig unloading his copies at some point will also push prices down. If the MTG market can be heavily swayed by a $20k investment, it's a lot smaller (and dumber) than I thought it was...
It will be interesting to see how it plays out over time. It also seems like a terrible idea to try to corner a market when you have no control of the supply (i.e. WOTC can reprint similar versions, just as you mentioned, and effectively destroy the strategy).
I also think WOTC is more organized than you give it credit for, and if cards markets are regularly getting 'cornered' to artificially increase prices, I think they'll react. Keep in mind, that's completely separate from price spikes due to genuinely high demand.
It will be interesting to see how it plays out over time. It also seems like a terrible idea to try to corner a market when you have no control of the supply (i.e. WOTC can reprint similar versions, just as you mentioned, and effectively destroy the strategy).
I also think WOTC is more organized than you give it credit for, and if cards markets are regularly getting 'cornered' to artificially increase prices, I think they'll react. Keep in mind, that's completely separate from price spikes due to genuinely high demand.
Henry_L
659
Jul 22, 2016
KevinIt's not just Craig, it's the fact he has the ability to mobilize thousands of players with deep pockets on youtube and reddit. I'm sure the actual quantity that was purchased outside of Craig and his friends was what really moved the needle at all. The aftermath is already starting to take shape. It seems like LED did stabilize, I feel that sellers came out in droves when they saw the buylist prices, and as it's in so many legacy decks the supply seems to be there. Moat and City of Traitors are another story, the trend is down but they seem to be more inelastic.
I'm excited to see the results as well, I just believe that the reception of messing with the reserved list would be really negative among the LGS network who makes the majority of their money through selling singles. It's why people continue to believe that the supply is fixed and WOTC has no desire to make any drastic changes.
Hopefully they respond or even acknowledge this issue. As of writing this, there has been no official response from WOTC about the buyouts.
I'm excited to see the results as well, I just believe that the reception of messing with the reserved list would be really negative among the LGS network who makes the majority of their money through selling singles. It's why people continue to believe that the supply is fixed and WOTC has no desire to make any drastic changes.
Hopefully they respond or even acknowledge this issue. As of writing this, there has been no official response from WOTC about the buyouts.
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I'm assuming that you all know about the reserved list, the list of cards Wizards have said they will not print ever again. This is where this inherent problem with MTG's secondary market all stems from and is, in my opinion, the real issue at play here.
Craig Berry is not the problem, but an evil created by this broken system that has been present ever since the reserved list was introduced. It is only now, after people understand how easy it is, that these issues are coming to the forefront of any current or prospective Eternal player, or MTG Trader. The problem is, with enough capital, you, me, or anyone else could purchase every copy of anything that sees Eternal play and create this scarcity. I liken it to how DeBeers creates artificial supply constraints on diamonds in order to raise prices. This is not something new.
So what do we do? Nothing really - we sit by idly while the big wigs at WOTC debate and figure out how they want to approach these issues. The problem there is that I don't think there is a person working at WOTC who has enough sway, or enough time to propose a revision to the list that has existed for this long. It is not a priority and any person that works at WOTC, no matter what their title, is in part responsible for moving their revenue numbers. At the end of the day any change to this list would not result in an increase in revenue unless this change was announced with a special booster box containing all reserve list cards (trollface).
So we have 2 problems, a systems where buyouts are a financially viable option (with enough capital), and a company that wants to care (hopefully) but does not have the desire or resources to change their reserved list. How do we fix this? Well, I actually think that Wizards have already approached the issue in a really interesting way in Eldritch Moon by printing Harmless Offering. Same text, similar casting cost, as the reserved list card, Donate. And it's being reprinted in a standard set! Sure this really has a very tiny effect on the current meta, it will combo with a few things, but more than anything it is a new take on how Wizards approaches reserved list cards.
It opens the door to printing functional reprints of reserved list cards with slight changes, like title or color. We'll see if this actually happens, as I still believe that most reserved list cards really will adversely affect standard so this is not a real answer, just an interesting take on a systemic issue that gives me hope that someone at WOTC is just as upset with these problems as we all are.
Let me know what you think in the comments below, do you like the precedent set by Wizards with harmless offering? I left out a ton of other viable solutions to the reserved list for brevity's sake. Feel free to bring those up in the discussion below and let's have a conversation :)