Thursday 27 August 2015

Magic the Gathering - Market Economy in CCGs

An interest in CCGs was sparked by a visit to a local game store.  I raised an eyebrow when gamers bought half a dozen $20 packs at a time.  (I live a sheltered life, OK!)

The fact they were trading Australian dollars for pieces of  paper/cardboard - which themselves were assigned a "value" by the company (and the players themselves)...

I was thinking  "Wow.  WoTC have a "currency" all of their own!

A quick google later and I was listening to The Curse of the Black Lotus.
It's a 15min audio. Go ahead and listen to it.

For the lazy bastards amongst you (i.e. the ones who ask me to review free rules - seriously, guys, it's free - download it and read it yourselves!) here's a quick summary. 

 Apparently one sold recently for $27,000....
The "Bubble"
There are "fads" like beanie babies.  These fads or or "bubbles" have stages.
The first stage is "this is cool."
The second stage, people realize there is money to be made reselling the "fad" item.  They are "speculators."
The third stage is there is an oversupply and the market crashes, and everyone moves to the next fad.

Magic the Gathering
Designed by math graduates, the cards were sold in packs ($3 back then) and occasionally there was a rare card. Kinda like buying a lottery ticket. 

What they didn't expect was the re-selling of rare cards.  These cards from a $3 pack became $10, then $500, and $1000 cards - within the first year. (Stage 2)

WotC was selling pieces of paper that people decided were worth a fortune. Speculators would buy decks by the truckload looking for rare cards.  Some at WotC wanted to ride this craze and focus on rare cards. 

However Magic is also a game. A cheap fun game to play with friends.  However, these rare powerful cards were messing with the game itself.  I mean, it's like being able to buy extra Aces in a poker game.  Was it worth cashing in short term?

The math guys at WotC graphed the life cycle of a fad to see how long they had before the inevitable  "crash."  About a two year time span. The math guys suggested they make Magic sustainable, instead of cashing in short term for millions.  Make less money now, but make it last 5 years, or 10 years.  To deflate the bubble in favour of a longer-lasting game.

Deflating the Bubble
So in 1994-95 they pumped out a slew of new card sets.  Lots and lots of them.  As they flooded the market, speculators would now no longer touch the new sets.  The WotC guys actually went out to shops. If the cards were selling for above RRP, they'd simply print out more and more. Until even the most stubborn speculators realized they had been devalued.

Now the old rare cards were still so powerful they unbalanced the game. And printing out new overpowered cards wasn't the answer either (and risked enraging the player base further).

Banning them didn't work. So they invented a professional Magic league.  (Ok, I was also amazed people would actually watch this... nerds!) where they could set the rules for allowed cards/decks. 

Players could still use their old cards. But to play like a pro, you had to use the new cards. And it worked.
Long Term Sustainability > Short Term Cash Grab
WotC learned their lesson.   They knew not to print out more powerful or even simply flashy cards. 
Swords, angels, wings, dragons, battles - are all popular.  So you'll never see a bat winged angel wielding a sword of doom while riding on a dragon! 

22 years on, Magic is still going strong, balancing gameplay and collectability. In fact least year was their best most profitable year ever.  Thumbs up to long term economic planning. 

I wish our politicians were as good at managing economies. 

This is probably nothing new to the geekier lurkers on this blog, but I thought it might be interesting for the rest of us, who only dabble on the edges of the CCG ocean...


  1. I've never been into CCGs so I found this interesting

  2. Yeah, WOTC are clever clever bastards.

    Their cycle also incidentally helps solve balance issues: They can print a card that will dominate the game completely, because in the tournament scene, it'll cycle out in a year or two.

  3. The parallels drawn in the podcast are not accurate. In fact, much of the information in the post is oversimplified or wrong.

    The crux of the problem is that people immediately started playing magic with no ante so there was no chance of ever losing your good cards and with no risk there was no fear in stacking your deck with the good stuff. Also, it's a myth that good cards win a Magic game. A good player will win a Magic game.

    In the early days the fast mana of the lotus and Moxes caused a bit of a stir but they were soon ignored, even before they were 'outlawed' by Wizards. The cards were still sought after because they were rare and the Black Lotus was the poster child of them all.

    Combinations of cards used intelligently win magic games, there are no game winner single cards and never have been.

    As for the value. rare cards were sought by collectors because they were rare and some rare cards were also good to use so they were sought by players too. Truth to tell, nearly all Magic players back then were collectors too, that's why it was such a hit, it scratched two itches.

    Since Magic cards have a finite run, especially the early ones, the rares get rarer over time and the price goes up for collectors. People pay thousands for comic books too. Looking askance at what people choose to value is pointless, especially if, like me, you spend too much a year on toy soldiers. Take a look at old Citadel prices paid by collectors some time.

    Wizards created the prices by making the cards rare and then holding tournaments you could win money at, eventually big money but by then it was new cards only of course.

    Typing in a small box has made this a bit rambling, sorry. And nothing is explained in detail (also sorry) because of space. I was there selling Magic in the beginning. I was selling individual cards in my shop before most people and also running tournaments. the early tournaments were dominated by cheats and liars who hid behind 'gamesmanship' to excuse their behaviour because, even then, quite a bit of money was at stake. The majority of players were honest of course, but they didn't win many tournaments.

    1. I find it interesting. I'd say it dominates if placed in a CCG-tabletop-boardgame context. Ironically enough I find it a bit confrontingly geeky and lack of models to swoop around the table going "pew pew" makes it a bit meh. That said, it certainly has a deep culture. I suspect there is a considerable level of metagaming to it as well.

    2. >Also, it's a myth that good cards win a Magic game. A good player will win a Magic game.

      A player who possesses both good cards and good skill will generally beat a player who possesses only one of those, regardless of which one that is. Also, the two are independent qualities -- having lots of one doesn't somehow limit how much of the other you can have. The whole "which is more important, cards or skill?" debate is almost always pointless.