The MTGO-to-Paper Metric
Returning to this metric is a great way to get a feel for what the MTGO market is doing in a broad sense. For those who are unfamiliar with how it works, it's a simple ratio that takes the Supernova bots sell price for a complete set, and divides it by Star City Games complete set sell price (all prices current as of April 12th, 2013).
Although the metric is itself meaningless, and Star City Games prices might not be representative of the 'true' price of a set, the ratio is still useful. Considering how the ratio moves over time can guide us on where prices might be headed. I introduced the metric back in my August 17th, 2012 article and have periodically returned to it, so if you want to read up on it some more, dig through the archives.
The thing that underpins the utility of this metric is redemption. When cards are cheap to acquire online, redeemers will buy up cards in order to convert them to paper and capture the price difference. When cards are expensive online, online sets represent little value to redeemers, which removes a key component of demand.
As a general guideline, when the ratio is in the 0.3 to 0.45 ticket range, this represents a good buying opportunity. In the 0.45 to 0.65 range, there might be a few cards that are still individual buys, but overall this level of the ratio indicates the set does not represent good value. At levels of 0.65 or higher, caution is the recommended course of action and it might be time to broadly sell cards from these sets.
|MTGO-to-Paper Ratio (Feb 14th)
|MTGO-to-Paper Ratio (Mar 14th)
|MTGO-to-Paper Ratio (Apr 12th)
|Scars of Mirrodin
|Return to Ravnica
Checking in with the ratio for specific sets, we can see that Scars of Mirrodin (SOM) block has seen recent price strength. The ratios are all above 0.7 with New Phyrexia (NPH) having a very high ratio of 1.03, indicating almost no value for redeemers.
When paper set prices are lower than digital prices, any price strength must be coming from shifts in the online metagame. In this case it looks like Modern is establishing itself on MTGO as a format that players will play out of season, with R/G Tron being a popular choice. This has pushed up the price of Karn Liberated. Also in NPH, Batterskull has bounced back in price, most likely due to renewed interest in Legacy tied in with GP Strasbourg.
Looking at the ratio for Innistrad (ISD) block, these sets are seeing price weakness as players begin to look out towards rotation in the Fall. At some point prices will drop enough that redeemers will get interested in buying ISD block cards, but we are months away from that. We'll wait for the ratio to drop much lower and for rotation to be much closer before starting to buy ISD block mythics and rares.
The online price of Return to Ravnica (RTR) has been relatively constant in recent weeks, but the recent drop in SCG's price for the set has pumped up the ratio to a very high level. This is a strong signal to me that RTR as a set is just about fully priced. With the ratio at a high level, the price and value of RTR is determined solely within the MTGO economy, and is currently not well tied to paper prices at all. This level of the ratio is what we might expect to see in the Fall, after Theros has been released.
In the short term, the high price of RTR should encourage more RRR drafting which will bring prices down. Next, the switch over to DGR Limited will provide a further increase of supply. It would be unwise to speculate on the pricier cards from this set at the moment. Sphinx's Revelation recently hit a high of 47 tix and I don't expect this price to hold over the next two months. Increased supply from drafters will help, but the metagame shakeup from the release of DGM might also reduce the utility of that card. The recently spoiled Sire of Insanity might break up the party that the Azorius X-Spell has been throwing the last few months.
If RtR doesn't represent good value, then what about Gatecrash (GTC)? The ratio for this set is near the low of 0.33 that Magic 2013 saw back in the Summer. That turned out to be a very good buying opportunity as cards like Thundermaw Hellkite and Thragtusk were both under 10 tix at the time. However, with GTC being the first set with the new, higher redemption fee, we should revise downwards our expectation on how low the ratio could go. I'd expect the ratio to fully bottom out during Dragon's Maze (DGM) release events, but current prices still do represent good value and I have started more broad buying of GTC cards.
This is a brief rundown of what I am buying, selling and looking out for in the market.
- I've mostly sold down any rares from RTR that hit attractive prices, so there's been not much selling from RTR this past week. Prices seemed to have come off a bit for RTR rares.
- Prime Speaker Zegana and Aurelia, the Warleader are two cards from GTC that I picked up during release events at reasonable prices and so I have sold these down with an eye on possibly rebuying during DGM release events.
- Frontline Medic in the 1-1.4 tix range and Gyre Sage for 0.75 tix or so. Both cards are probable Standard staples out of GTC, so I intend to establish positions of at least 50 copies over the next few weeks. Current price expectations around these cards are anchored since we're in a period of GGG drafting. Once GGG drafting stops, prices should rise.
- The GTC versions of Watery Grave and Godless Shrine have both come down closer to 3 tix, so I have started buying these. I am avoiding the higher priced GTC shocklands at the moment, but at around 3 tix, any shockland should yield profits come the Fall.
- GTC junk mythics in the 0.5 to 1.0 tix range have piqued my interest. Hellkite Tyrant, Deathpact Angel, Borborygmos Enraged and Lazav, Dimir Mastermind all seem like good value in different sections of that price range. There will be a supply push of junk mythics during DGM release events, and so I will finish up my buying of these at that time. I don't actively look for these cards, but I do pick them up when I see them at cheap prices.
- Intruder Alarm is a card I have been picking up when I find cheap copies. It might find a home in Modern with Beck/Call from DGM and is from two lightly-printed sets. With any semblance of decency, this card will see a very strong price spike.
- GTC boosters have drifted down in price and I'd expect this trend to continue. A drop in GTC booster prices during DGM release events would suggest a good buying opportunity.
- Mythic rares from SOM block have dropped in price somewhat, so I have stopped selling these for the moment.
- Legacy staples have seen price strength recently, including Lion's Eye Diamond reaching an all-time high and even Force of Will has bounced back from it's recent depressed price level. The interest in Legacy has probably stalled price drops on cards like Tarmogoyf, despite the looming reprints coming in Modern Masters.
- Duskmantle Seer has just popped up above 5 tix on Cardbot, probably due to the recent Sam Black article and video. These featured an aggro BUG list with 4 Duskmantle Seer at the top of the curve. I've stopped buying this one and will look to sell if it gets closer to 10 tix over the next couple of weeks. Otherwise, I will hold for the Fall.