In the world of MTGO speculating, certain factors have a larger influence on the digital economy than others. One of these highly influential factors is set redemption.
In a previous article, I outlined how set redemption affects the MTGO economy. If you need a refresher I'd recommend starting there. Today I'm going to analyze some price data to illustrate some of these principles in action.
Comparing MTGO and Paper Prices
Presented below is a chart with set prices from the last 4 years, both from supernova bots and Star City Games. A simple ratio is calculated using these two values to show how an online set is priced relative to its paper counterpart. Also presented are the ratios from the previous time this metric was used. This illustrates how the relative value of sets can change over time and informs what broader trends can be expected in the MTGO market.
|MTGO to Paper Ratio (Aug 12th)
|MTGO to Paper Ratio (Nov 14th)
|Shards of Alara
|Rise of the Eldrazi
|Scars of Mirrodin
|Return to Ravnica
The Non-Redeemable Sets
Shards of Alara block and Magic 2010 have seen further price declines overall. Without redemption to support prices, these sets are priced according to the presence of tournament staples. Eternal play is still dwarfed by Standard, so the down trend in these ratios is not unexpected.
Zendikar block and Magic 2011 just went offline for redemption. This means there is no longer a strong connection between digital and paper prices for these sets. In the table, the trend for these sets as well as other non-redeemable sets is mostly down, with Zendikar being the exception. The price of online sets are falling relative to paper prices. Expect this trend to continue so avoid speculating on cards that are not format staples as the long term trend for these sets is down. Any reprints or Zen block draft queues will make a large impact on prices without redemption to sop up extra supply.
Opportunities in Scars Block
Scars block and Magic 2012 just rotated out of Standard and the price on these sets has fallen for both digital and paper versions. New Phyrexia (NPH) has the highest ratio of these sets, and the other three all have a ratio about 2/3 the value of NPH. On a relative basis, this suggests that redeemers will have more incentive to convert the first two Scars block sets rather than NPH to capture the greater price differential.
With reprints in the core set muddying the waters somewhat, the recommended course of action is to focus on mythics from Mirrodin Besieged (MBS) and Scars of Mirrodin (SOM), in that order. From MBS, cards like Hero of Oxid Ridge and Consecrated Sphinx are good medium term targets and both have bounced off of their post rotation lows. Longer term, both Tezzeret, Agent of Bolas and Sword of Feast and Famine will benefit from being both redeemable and playable in Eternal formats.
Nissa Revane as a Guide
Nissa Revane saw a steady price increase after Zendikar rotated. The trajectory of this card can inform an approach to potential speculation targets from SOM. The presence of the fetch lands in Zendikar no doubt increased demand from redeemers for all ZEN mythics, so lower price targets are more realistic for SOM mythics.
In the chart below, the price bottom of Nissa Revane is clearly visible just prior to rotation in October 2011, followed by a steady up trend over the course of the year. A price peak is observed just prior to the end of Zendikar redemption, followed by a sharp decline.
The trio of planeswalkers from SOM have all found their post rotation lows. Elspeth Tirel, Koth of the Hammer and Venser, the Sojourner should all see steady increases in prices over the following year.
The Big Lesson
Looking back to the August ratios, one of the lowest for in-print sets was Magic 2013. In retrospect there turned out to be a ton of value in Magic 2013 back in August. We've seen Thundermaw Hellkite, Sublime Archangel and Thragtusk drag the ratio much higher in the last six weeks. It's foolish to suggest the ratio predicted price increases on these cards, but it definitely pointed to the online set being priced too low.
Looking at the highest ratios, the old high was held by Rise of the Eldrazi, and the current high is held by Avacyn Restored. At this point, this ratio metric is not very well developed, but it suggests that Avacyn Restored is close to being fully priced and does not present much value overall. On the other hand, despite the recent price increase on the cards from Magic 2013, it looks like there is still some value in this set as its ratio is currently in the middle of the pack.
In particular, both Ajani, Caller of the Pride and Liliana of the Dark Realms have seen slightly higher prices in the last month, which can be attributed mostly to redemption and the slowdown in core set drafting. Both of these planeswalkers could see more play in Standard than they do currently, and with Gatecrash looming expect the format to be shaken up.
Aggressive mono red decks are the current beatdown deck of choice on MTGO. Its rock solid mana base is a part of the reason. Once Sacred Foundry is available, along with any Boros goodies, aggressive R/W builds will become more viable and Ajani looks well suited to appear in decks that enjoy the attack step. In particular, the interaction between Precinct Captain and Ajani seems currently underexploited. For those with only a few tix, Precinct Captain appears well positioned to join the Boros guild.
Liliana of the Dark Realms's +1 Loyalty ability is only functioning at half power in the current Standard environment. When Watery Grave and Godless Shrine are printed in Gatecrash, the cycle of swamp shocklands will be complete, reducing deck building restrictions on this card. Liliana of the Dark Realms might fit into an Esper control deck at that time, so currently this card represents good value to the patient speculator.
Both the new Ajani and new Liliana currently present low-risk opportunities as they are near their respective price floors, and redemption will support prices for M13 mythics. The prices on the other mythic rares that have broken out give a good indicator for potential gains.
Dark Ascension (DKA) has one of the higher ratios of the redeemable sets, which suggests that DKA presents less value to redeemers and should be avoided by speculators. Without demand due to redemption, prices are more volatile and thus present riskier opportunities. This is not to suggest there are no gains to be had from speculating on cards from DKA, but that speculators tread cautiously when assessing cards from this set.
Return to Ravnica
Interestingly enough, Return to Ravnica (RtR) presents the best opportunity for speculators, as indicated by the ratio. Redemption for RtR begins after the downtime today, Wednesday November 14th 2012, which means the ratio will start to rise. The start of redemption will push a steady supply of physical sets into the real world, bringing down IRL prices.
Also although it's not known whether redemption consumes all the packs that are currently opened in draft, it seems unlikely that that is the case. This suggests that that online prices for cards from RtR should continue to fall over the coming weeks. It's expected that IRL prices fall faster than digital prices. Keeping an eye on the ratio will inform us which effect is dominating.
Also, a low RtR ratio in the New Year would suggest a good speculative opportunity. Once Gatecrash is released online, RtR drafting will slow down considerably. This will reduce new supply. If the ratio stays low, demand from redeemers should be unchanged as they seek to capture the difference between digital and paper prices. This would indicate that RtR could offer exceptional value as a speculation target in the weeks leading up to the release of Gatecrash.