The Unwilling Speculators

There has been a lot said and written about the spikes in Modern card prices over the past few months, and much of it has been aimed at speculators. I completely understand the frustration with ever-increasing Modern card prices—I am a player and I feel it too. Until last weekend, I would have told you that this was a normal side-effect of Magic’s popularity and that speculators were not at fault.

After the DCI Banned & Restricted List announcement on Monday, I am ready to lay some blame. Not on the speculators, but on the people who are ultimately responsible for the health of this game (which includes the secondary market). The rash of spikes may be a normal side-effect to some extent, but I’m convinced now that mishandling by Wizards of the Coast is making things far worse.

Setting the Record Straight

Before I go there, I want to talk about the “blame the speculators” movement that’s been gaining traction over the past few weeks. I don’t think it is fair.

Now, not everyone uses the term “speculator” the same way. For some, a speculator is a market-manipulator, artificially propping up prices through buyouts and then cashing in. I assure you that this type of “speculator” is looked upon fondly by no one, myself and the writers at Brainstorm Brewery included. I’m not convinced that there is as much of this going on as some people think, but if there is then “speculator” is the wrong term anyway. Market manipulation is just that, there is no speculation involved as far as I can tell. I have no defense of this group, though I don’t think they are much of a problem either. Maybe if you are big enough to run your own tournament series you could do some damage with this method. Otherwise, it’s just stupid and risky and not as profitable as it might seem.

Others use the term “speculator” in a broader sense. Just about anyone buying, selling, and trading cards with profit motive can be lumped in, and that covers quite a range of people. This is the group that is being criticized unduly, in my opinion. Stocked up on rotating staples ahead of Modern season? Speculator. Picked up some Standard cards because your testing showed a potential breakout deck? Speculator.

God forbid you buy into whatever Modern card is being hyped on Twitter. May the seven plagues descend on your home for your role in the destruction of Magic: The Gathering.

Yes, I’ve heard some pretty dumb things said about speculators. Some of them were said by people who usually say dumb things, some weren’t. All of them boil down to this: frustration with constantly increasing and unpredictable card prices. I get it.

The root cause of these spikes is the explosion in Magic’s popularity. New players are pumping dollars into the game like a Street Fighter II cabinet in the 90s, and spiking prices just represent these dollars finding a home. If you think this foreshadows the end of Magic somehow, then we need your help. Please save us from all the money.

I wasn’t upset with the Modern spikes when they were happening, unlike some others. I felt that, for the most part, those spikes happened to cards that were due for increases. Modern is becoming an incredibly popular format and the cards don’t rotate. That means that there will be constant upward pressure on prices barring reprints, so you can’t durdle when buying the cards you need. I can only feel so bad for someone because Primeval Titan didn’t wait around at $7 until he or she finally decided to pull the trigger on a set.

The fact is that speculators are not the cause, they are the symptom. The money rushing in is making it quite profitable to buy, sell, and trade Magic cards, and there is nothing wrong with taking advantage of that as long as you do it with integrity.

Unregulated Market?

The bigger question is: why do these opportunities exist? Magic has never cheap to play but it has never like this, either. The volatility in prices today is remarkable, especially in Modern.

I get a kick out of it when people call the Magic secondary market “unregulated.” This is a market where a single company has unilateral control over supply and heavy influence on demand. While it doesn’t oversee each transaction, this company—if it was paying attention—could do quite a bit to control prices in the secondary market. That could make buying out TCGplayer a much less attractive proposition.

Although it’s hard to see, someone is regulating this market. They are just doing a awful job. And so:

Thanks, Wizards. I’m not one of those guys who blames WotC for everything, but this is a problem.

Wizards lit a fire when they created Modern, and it is obvious to me now that it is burning out of control. The format is more popular than they imagined and they have fallen woefully short of matching this with new supply. I keep picturing the scene in Office Space where Peter, Michael, and Samir find out that their program dropped $300,000 in the bank account the first day. Whoops.

Markets hate uncertainty and instability. The Modern market is insane because Wizards has done nothing but create uncertainty and instability. The banned and restricted update is just the icing on the cake (or should I say, gasoline on the fire).

Let’s recap this DCI Banned & Restricted List change and the events that led up to it:

  1. Wizards decided when they created Modern that they would be heavy-handed with bans, creating uncertainty about how long any particular card would be playable in the format (assuming it was a good card).

  2. Wizards then decided that they would keep the format fresh by regularly unbanning cards, creating uncertainty not only around what is leaving the format, but what is coming back in.

  3. Wizards scheduled the announcement for just a few weeks before the Modern Pro Tour. This created as much uncertainty as possible around what would be playable at the biggest Modern event of the year and then gave everyone a short window to acquire the new cards they would need.

  4. Wizards decided to unban a card that they knew was in short supply. This card was printed six years ago and left out of Modern Masters. Seems good.

Oh, and I don’t want to forget that [card]Bitterblossom[/card] spiked 50% ten days before the announcement. I don’t know for sure if it leaked, but I do know that [card]Jace, the Mind Sculptor[/card] didn’t spike. I know that [card]Ancestral Vision[/card] didn’t spike. And I also remember [card]Aluren[/card].

What did they think was going to happen? They could not possibly have aggravated the market more if they tried.

The truth is that Wizards didn’t think about the market implications at all. They don’t seem to have a cohesive plan to make Modern an accessible format, and if they did, they certainly wouldn’t tell us. Maybe we can look forward to Modern Masters II next year and [card]Tarmogoyf[/card] will drop from $250 to $200. Maybe they’ll just ban it. Who knows!? For their part, Wizards only needs a few more months of goldfishing Modern decks to figure out if Jace is safe to unban. Don’t worry, has them for only $400 each! Non-foil, of course.

If you are a Modern player, what are you supposed to do? New players and new money keep flowing in and Wizards keeps doing nothing about it (when they aren’t making it much worse). They have vaguely indicated that they don’t want constructed Magic to be “too expensive,” but what does that mean? The most played deck in Modern right now (Jund, according to is $1,700 in paper. Even if they wanted to reduce that, they have not shown the agility as an organization to keep up with demand.

Modern Masters gave us nothing more than a breather. Modern Masters II is a rumor and thought to be scheduled for 2015. It’s not enough. They aren’t getting the job done. What is a [card]Misty Rainforest[/card] going to cost in June of 2015?

All of this leads Modern players to the following conclusions:

  1. There is a very good chance that any particular Modern-playable card will never be cheaper than it is right now. Money and players continue to pour in. Reprints are coming slowly and they may not even reduce the price (‘Goyf, Bob). The cards won’t rotate. Buy Modern playables now, otherwise you might not be able to afford them.

  2. Cards that are not Modern playable now but are powerful enough to be playable in the right deck will probably never be cheaper than right now. Wizards has shown a willingness to shake up the format dramatically and unpredictably with bans and unbans which can pop these cards overnight. Buy potential Modern playables now, otherwise you might not be able to afford them.

  3. Cards that are on the Modern banned list will probably never be cheaper than they are right now. Wizards has shown the willingness to unban cards in Modern and these cards tend to skyrocket overnight. Buy banned Modern cards now, otherwise you might not be able to afford them.

Wizards’s inability to scale supply means that if you want to play Modern, you really should buy everything you need or might need right now. I mean that. It is very difficult to justify waiting on buying any Modern card right now. Prices are going up, up, up and there is very little relief in sight. It is a constant struggle to avoid being priced out of this format.

In this way, Wizards has turned every Modern player into an Unwilling Speculator.

So please, don’t blame the speculators.

Thanks for reading.


About the Author
@acmtg   -    Articles Anthony is your typical started-during-Revised-then-quit-then-came-back-years-later Magic player. He enjoys the financial aspect of the game the most, mainly because it lets him use his analytical side but also because it makes up for the money he hemorrhages drafting on MTGO.

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