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Insider: Version 3 Shutdown & Other Investment Opportunities

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One thing we've talked about frequently in this column is the coming switchover from the current MTGO client (v3) to the current Beta (v4).

Several months ago, Wizards announced that the transition would occur in July, but after a disastrous "wide beta spotlight" in May, many people thought the v3 shutdown would be delayed until more kinks had been worked out. Surely they wouldn't force us all to use an interface that was this buggy and flawed, would they?

Well word came down this week that the v3 shutdown would proceed as planned, on July 16. As you might imagine, the feedback on the interwebs was understated and respectful.

And that's not the worst of it.

Of course, the frustration is understandable--the team has had three years to design a product that feels like a serious step backward.

It's the End of the World as We Know It, and I Feel Fine

So the new client is something of a train wreck, but at least the MTGO team will now be able to focus squarely on making improvements rather than trying to manage two sub-par clients. We knew this day would come, and if you've been reading this column and following the forums you have taken necessary precautions, right?

The first few months will be the worst and we could see the MTGO economy lose 20% of its value (or more) but in the end things will bounce back and we should see continuous improvement. (And perhaps now that v4 is launching they can get v5 in the works for release in 2020...)

One of the biggest challenges is the new trading interface. The client is tolerable for playing, but trading is a nightmare. This dimension of the client needs a serious overhaul, and I hope this is high on their list because it will seriously affect the ability of players to manage and sustain their collections.

There are also serious questions about how the new client will work with existing bot software, which could create further disruptions in the MTGO economy.

How Should We Respond?

There's a temptation to go out and sell your collection altogether. The problem is that a) lots of other people have the same idea and so offer prices will be lower, and b) prices are already depressed because of heavy VMA drafting, which has been sucking tickets out of the MTGO economy.

That said, it makes sense to protect yourself from this type of market-wide uncertainty:

  • Sell what you don’t need: You’ve been reading this column (and others) and liquidated your rotating staples when they were high, right? Good. You may also want to hedge by selling excess Modern stock that you are not actively using or have not specifically targeted. I pared back a bit in the past couple months and sold off another 3000 tix worth of cards the day after the announcement.
  • Redeemable cards will hold their value better than non-redeemable cards: In the case of a market crash, an inherent floor will exist underneath redeemable cards. This is not the case for older cards that have lost their link to the paper economy. I would *not* sell Theros block cards at the moment since they are at that floor. Instead I am paring back my Modern, Legacy, and Vintage collection.
  • Cash out: Cash is king, especially in a down market. Lots of people will be looking to sell their collections and the price of tickets may tank to 0.85 or below. I would be hesitant to buy tickets at the moment unless you need them and can put them to use to make you some money. Note that MTGO Traders is currently buying tix at 0.95, which is up from their recent rates. This is a result of the VMA liquidity crunch and is a good opportunity to turn tix to cash (which, last time I checked, was legal tender for all debts public and private.) During past sell-offs, it was not only cards that dropped in value but event tickets as well.
  • Boosters may rise: Matthew Lewis lays out a good argument for why in this forum post. To sum it up, "Drafting is still popular and relatively pleasant on the wide beta, as far as I am aware. It's trading and deck building (both big components of playing Constructed) that are not so hot. If there's an exodus of players due to the switchover, it will hit the Constructed side of things more heavily. Which will interrupt the steady supply of boosters from Constructed events. As long as boosters are still traded on the classifieds, this will put significant pressure on the price of boosters as long as they are less than 4 tix." All boosters are currently low, and could yield a nice return.
  • Prepare for sell offs: Early July through August could be a good time for bargain hunters. Being liquid is never a bad thing during turbulent times.
  • Take profits where you can: One way to protect yourself is to take profits from past specs. They may of course go up a bit more, but you probably caught the best part of the ride--and other opportunities abound. Here are some of the ones we recommended in previous articles:

Good Specs to Liquidate

If you bought a portfolio of the cards we recommended in the VMA runup you would have done quite nicely--most saw increases of 50% or more.

Of course, I’m sad to say that I missed some of the best targets. These cards have had jetpacks strapped to their back and I caught on too late, only buying my own playset:

I missed these...hope you didn't.

These cards were very low supply, and got a huge boost from Legacy and Vintage. Those charts from MTGGoldfish have exploded.

The Zendikar fetchlands that we recommended last week also did nicely, especially Misty Rainforest, as have the Onslaught fetches. I think these are both good to sell given the market uncertainty and the risk or reprint in Khans of Tarkir.

Our general principle—buy Legacy and Vintage staples that were unlikely to see reprints in VMA—was vindicated and profitable. But there will always be some good opportunities that slip through the cracks.

Buying Opportunities

In previous weeks I cautioned that while rares will be cheap, we should keep our powder dry since prices will continue to drop so long as the set is being heavily opened.

The problem is that we don't know when that moment will be. Wizards has announced that after release events end on July 2, VMA will still be available in the stores and there will be a selection of VMA Limited events. However, it is not clear what this will mean. Will players seeking a VMA fix be relegated to one or two Sealed Daily Events? Or will there still be on-demand drafts and Sealed queues? The answer to this question will make a big difference.

If Wizards turns off on-demand drafting on July 2 we could see a bump in prices this week. The supply spigot will switch from a stream to a trickle. In anticipation of rising prices, players who sold off their playsets of various cards will start to buy in, bots will raise prices as influx of supply dries, and investors like ourselves will move to take a position in cheap Legacy staples.

This is a trend we see with popular “flashback” drafts. If a flashback format lasts two weeks, the first week is usually marked by falling prices. During the second week, prices start to rise, even as the set is still being opened. We may be approaching that inflection point for VMA even though there is a week of drafting--and two months of VMA Sealed--ahead.

So what will happen July 2?

A Prediction

My belief is that Wizards will not want to detract from their M15 release. They know that if VMA and M15 drafts are offered concurrently, people will split their drafting between each. In general, core sets don't have the same "shelf life" for drafters, so there is only a brief window for Wizards to stoke interest in M15.

Whatever concerns you may have about the MTGO team, you should rest assured that when it comes to analyzing revenue streams they will have done their homework and have a sense of exactly how much VMA will cannabalize from their primary product, M15.

So I think we are likely to see a significant decrease in the availability of VMA events as M15 pre-releases begin on July 25-27. VMA will continue to enter the market but the rate of supply will substantially decrease. In the forums, folks were estimating that there are currently 1300 packs of VMA opened each hour right now—even if every Sealed DE fires at full capacity we are looking at a fraction of that open rate. So supply will diminish.

In parallel, demand from speculators and "hoarders" is likely to increase since they will have a legitimate chance to dominate the market on cards such as P9. If prices start to finally rise, players will become concerned that they could miss the boat, and the rate of increase could accelerate.

I do think Wizards will bring back a couple of weeks of drafting of VMA in late August, which would be the window between M15 and Khans of Tarkir. At that time, prices on VMA staples should drop again. But in the short run there should be opportunities for profit.

A Window for Buying Vintage Masters?

If my prediction is on target, high-demand rares and mythics in VMA will lead to significant increases from today's low prices. This is what happened with Modern Masters cards when drafting ended. The analogue is imperfect since VMA will still be available in some form, but we may see a similar trend in diminished degree. This weekend is a great time to buy because of the v3 fears and heavy drafting.

What types of cards should we look for?

I am looking for cards that:

  • Have low pre-VMA supply or are unique to VMA
  • Are four-of in their respective decks
  • Are at their all-time low price
  • Are playable in multiple decks
  • Are a key piece of an otherwise affordable deck in Vintage or Legacy

If a card meets several of these criteria it is worth a close look. Here is a list of potential specs that fit the bill:

Mythics

Rares

Uncommons

Betting on uncommons from such a heavily opened set may be a losing proposition, but it worked in MMA. Swords to Plowshares and all-star common Brainstorm may also have promise, but they have many printings so moderate your expectations.

In summary, the VMA index suggests that the overall prices of the set have stabilized at a low level (though some have seen a modest rise since I started writing this article). Almost all of the value is centered in the P9, and prices of the rares and mythics are unlikely to fall much further. I think that now is the time to buy in to these cards. The upside outweighs downside risk (namely that Wizards extends on-demand VMA drafting.)

I believe there is also excellent value in the P9 in the long run--and potentially in the short run if we see the trends I described above. However, these tie up a lot of your capital and run contrary to the number one rule, which is stay liquid.

If you had to pick one piece of power I would nab a Mox Sapphire. It still costs less than Ancestral Recall despite seeing more play in more decks.

Grixis Control in Vintage Masters?

How has Vintage Masters draft and sealed been going for you?

The major archetypes have been well covered at this point. U/G Madness, R/W Aggro, and Rift Slide are every bit as good as advertised, and Storm can be brutal. But this week I wanted to highlight an under-recognized strategy that Simon Goertzen posted about the other day: UBr Control.

Pretty janky, right? Most of these cards are not high picks, and it’s hard to imagine this deck beating a focused aggressive deck. Yet Simon, whose opinion I respect immensely, described the Urborg Uprising engine as “unbeatable, both with Looter and without.” He noted that the deck was super threat light but still made it to the finals, where he split.

Taking my cue from him, I tried out this type of Grixis Control deck after starting in Storm and getting cut off. What I thought was a train wreck of a deck performed surprisingly well.

Nightscape Familiar stops early threats and powers out your powerful late game. You get to run the best instants and sorceries in the format and powerful cycling creatures. Then you get to recur them with Urborg Uprising and Scrivener. You have good sideboard options vs the most dangerous strategies.

Best of all, you can get most of your key cards in the back half of the pack so you don’t end up fighting for Wild Mongrel, Battle Screech, and Lightning Rift. You may want to give this strategy a spin.

Happy hunting!

-Alexander Carl (@thoughtlaced)

13 thoughts on “Insider: Version 3 Shutdown & Other Investment Opportunities

  1. For someone just dabbling in speculation, this column is so helpful. The insight is simple, practical, and easy to understand. I can read, consider, and then go forward without much time and risk. Thanks!

  2. I don’t understand why Wizards would view it as a bad thing to “split the player base” on M15/VMA. It would be one thing if it were a cheap format, but every time someone chooses to draft VMA>M15 WOTC wins.

    1. You’re certainly right on a per-draft basis that VMA generates more revenue. But in terms of the big picture, Wizards likes to push its new products when it releases them and create a media buzz in which everyone who is talking about Magic is talking about the latest release. This also connects with paper interest, which is overlapping and reinforcing. Having people stream and write about VMA during M15 release events is “off message” and would take a way from that buzz.

      In addition, core sets in particular tend to have a short shelf life, and Wizards wants to wring whatever revenue they can out of them before people get bored and the format expires. They know they can bring VMA back as an “evergreen” format and that people will be excited to draft it. In fact, having a break from VMA drafting will make people more excited to play it when it comes back.

      I have no empirical data to back this so it’s just a hunch. But that would seem to be the best way for them to maximize revenues.

  3. One other thing we should be doing:

    Opening as many new accounts as possible/you think you could ever possibly need.

    Between the freeroll prerelease offer, and the New Player queues, you should easily be able to recoup the $10.00, if you actually enjoy playing at all.

    Also, Bot Owners, don’t forget that all your bots will have a Freeroll!

    1. Are they really giving these to all accounts, even newly-formed ones? If so, it seems like a no brainier to open another account or two. Good call.

  4. They somewhat fixed the trading interface the other day. It mimics the old look of the v3 client. It just doesn’t pop the window to the top of the screen.

    Personally I love the new client. The only problem I have with it is the small card size. I wish the cards were easier to see on an average sized laptop screen.

    As to investments, I pulled a foil JtMS in a VMA queue and was surprised to to find it worth around 25 tix. Also, foil Dual Lands seem like a solid buy right now. Maybe I will wait for the client shift and buy in then. Still, some of the foils seem under valued right now.

    1. Good to hear that they are making improvements to the trade interface. That gives me more hope. The card size remains a major issue for me.

      I think there is probably good money to be made in foils but I have never understood the foil market and have generally stayed away. There is a portion of the legacy and vintage community that puts a high premium on foils. However it’s not clear to me whether the VMA versions will be seen as the “pimp” versions of these cards.

      Foil JtMS may be a special case since it has to compete with a large number of foil FtV20 versions.

      I think it’s wise when you are looking to buy a card to check foil version as well. Often the difference is negligible and represents good value. Just be aware that it’s harder to sell foils–regulars are much more liquid. .

    2. I asked support if newly created accounts will get the 35 phantom points and their replay was:

      Thank you for contacting Wizards Customer Service. The only information we have about the account getting a Prerelease token and phantom points is what was in the article.

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