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Insider: Magic Online Finance Lessons from the Pro Tour

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PT Price Spirals Come and Go Like the Seasons

Pro Tours have a significant impact on the financial landscape of its accompanying constructed format, which is Standard for three out of four Pro Tours. Pro Tours take place right after the release of a new set, which has inevitably thrown the metagame into disarray. Standard has the smallest card pool of the competitive constructed formats, so relatively it's the most impacted by new cards.

With the new metagame undefined, there is uncertainty in the market. There is also uncertainty in the new cards themselves, which are not yet tournament-tested, and their value in the format uncertain. It is left to the pros to figure out the format and define the metagame going forward, and the market reacts to the demand-shaping effects of the Pro Tour.

With uncertainty comes speculation, and in the weeks and days ahead of the Pro Tour, there is a significant amount of speculation occurring in the marketplace. With so many cards in each new set having potential for Standard success, there is no lack of potential speculation targets. There is certainly much speculation in paper cards taking place, but the card market of Magic Online presents a very interesting case study because of how quickly it moves.

After a set release, the price of new cards tends to slowly trend downward as additional supply enters the market from Limited tournaments and simply cracking product, but before a Pro Tour, there are is an inflection point where the price of cards begin to rise, as speculation heightens in anticipation of the tournament. In the few days before this Pro Tour, as in the days before each past Pro Tour in recent memory, there was a massive increase in the price of many new-set cards, which is clearly driven by speculators. This past Wednesday, the price of Magic Online Magic Origins staples spiked, and prices continued to grow into the start of the Pro Tour on Friday.

Speculation takes place by many different parties. Members of Pro Tour teams have the ability to make informed speculation decisions, and have the ability to tell others. Information also simply gets out, and savvy card vendors, local or international, online or brick and mortar, or even Magic Online bots, are able to make predictions on the metagame and the market based on who buys what in the days before a Pro Tour, and use this information to drive speculation decisions. There are just as many speculators acting purely on the knowledge that the Pro Tour tends to drive prices upwards, and betting on a card or basket of cards has potential for big gains.

As the Pro Tour began to unfold on Friday, information about the competitors’ Standard decks begins to became public. At this point it was not yet clear what decks were the best of the bunch, but some picture of the metagame developed, and the market reacted throughout the day. Cards that received a lot of airtime and feature match success began to rise even higher in price to inflated heights buoyed by the speculators. Cards that were not as successful began to fall in price.

On the Saturday of the Pro Tour, the price of staples began to fall, including relative failures like Demonic Pact and Jace, Vryn's Prodigy, but even the huge successes, including Abbot of Keral Keep and Hangarback Walker. It's clear that many speculators dumped their cards and locked in their profits, rather than hold out for the stormy weather of the Top 8.

On Sunday, with the Top 8 being broadcast and many decklists revealed, the buzz around the Pro Tour was renewed, and there was a card buying frenzy on MTGO that increased the price of all the staples, bringing Hangarback Walker above its Friday peak, and Pro Tour-winning Abbot of Keral Keep from its low of 2.4 tix on Saturday to 4.4 on Sunday.

The price of the losing cards was grim, with cards like Demonic Pact and Jace, Vryn's Prodigy falling to their all-time lows.

After Pro Tour Magic Origins and during the Monday afterward, the frenzy surrounding the top Pro Tour decks began to wane, and with prices peaked, speculators heavily moved out of their positions. The prices of the most expensive cards began to sharply move downwards, losing between 30%-50% of their value. Interestingly, the price of many losing cards immediately began to rise, which made their immediate post-PT crash the best time to buy.

Now with product continuing to enter the market, there is a constant downward price pressure that even the best cards cannot escape. The price of everything is slowly trending downwards, but the best cards are remaining relatively steady after their post-PT crash, meaning players are demanding enough of them to keep up with new supply entering the market. The price of these cards will eventually begin to slowly fall in price until the set stops being drafted.

Don’t Count Out Rotating Cards

The Pro Tour impacts the price of more than just new cards, and it changes the value of everything else in the format too. Pro Tour Magic Origins happened to take place shortly before Standard rotation, which typically suppresses the value of Standard cards. When the metagame changes, however, players will adjust, as there are still tournaments to be played in the current format, and the market reacts accordingly.

Magic Origins had a particularly strong impact on the paper price of Ensoul Artifact, which went from under $1 to over $5 the Monday after the Pro Tour, and it’s still over $4. A more modest gainer, Phyrexian Revoker went from $0.8 last week to $1.15 today, and it’s still trending upwards. These two cards are unique in that they are useful beyond Standard, so their prices will hold fast through rotation.

The risks associated with imminently rotating cards are easier to mitigate in the liquid world of MTGO, so Pro Tour Magic Origins had a significant impact on the price of cards throughout Standard. Courser of Kruphix, which sat at just over 4 tix after the Pro Tour, has grown to over 7 tix; many different archetypes include the card, including Abzan Control, G/W & Abzan Constellation, G/W Aggro, and G/R Devotion.

The price trajectories of other cards is similar, including Anger of the Gods, which in the same period nearly doubled to two tix, and has since grown past 3 tix on the news of Michael Majors' GP San Diego Win with U/R Mill. Perhaps the most startling price increase after the Pro Tour was Whelming Wave, a component of the U/R Mill deck, which grew from 0.07 to 0.55 tix, and has since grown to nearly 1 tix.

Takeaways

The price movements of cards in the new set before a Pro Tour, as observed by looking at the price graphs of new cards in the time around Pro Tour Origins and recent past Pro Tours, are reasonably predictable. There is plenty of room for making profit through speculation during future Pro Tours.

Time is of the essence, and it's necessary to gauge the cheapest price of a card before it spikes before a Pro Tour, and to gauge the correct time to sell before it falls after the Pro Tour, and then to act on the information through trading. For many, Magic Online is the easiest platform for this sort of speculation, because trades can take place instantly and without transaction cost.

For paper card vendors, it's beneficial to acquire targets as early as possible before prices increase and supply dries up, so information is more valuable the earlier it is acquired. For paper vendors there may also be additional risks of being unable to liquidate specs, but there is also more upside, where markets in a local area or on the morning of a large event may allow these cards to command a premium.

What did you learn from Pro Tour Magic Origins?

-Adam

One thought on “Insider: Magic Online Finance Lessons from the Pro Tour

  1. This past season, there were a few cards I could almost always count on for cyclical gains centered around new set release and pro tours:

    Mana Confluence (Gold mine!)
    Temple of Epiphany and Malady
    Goblin Rabblemaster (though not for PT Origins)
    Courser of Kruphix

    Their swings were large and predictable (sometimes 10+ tix each way). I hope there is a new set of cards like this for the upcoming season. Any guesses as to what it might be? Possibly the flip-walkers, deathmist raptor, collected company, den protector.

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