Special: Will Corona effect card prices?

12 Mar
by Peter

The novel Corona virus is the talk of the town (globally) and will probably keep us busy over the coming months as well. As we see the effects on daily life and the stockmarkets, people start asking questions about links between Magic and Corona too. People mail us with questions about card prices and we see the chatter on socials too. So, maybe it is time to address some issues concerning card prices.

Nausea
Exotic Disease
Orim's Cure

In this article, I will answer a few of the questions we have gotten and indulge in some speculation.

 

Does Corona already effect card prices?

No. At this time we see no effect on card prices due to the virus. I have looked at the big staples in all the formats, card prices in general and our interests. There are no signs at all that price movements are motivated by fear or opportunity due to the virus. Neither do I expect any impact on cards prices, even when there will be huge lockdowns and/or a financial crisis.

 

Stock markets have gone down, can you expect this trend in Magic too?

Very unlikely. I know, our site is called MTGStocks.com, we have a small ticker running at the top of the screen and we present card graphs that look a bit like stock prices. But to be honest, the stock market and Magic finance are two completely different worlds. Yes, both are driven by supply, demand, trust and speculation. But there are far more differences than similarities.

A good example is the Netflix stock. That stock is not very negatively effected by Corona, but has a lot of trade volume on it. Over the past weeks it has been going up and down, probably due to speculation. Its trend is up, because when people get sick, they get into bed, sleep and watch streaming services. Real-world effects on real-world events. This counts for all stocks on the market. And those kind of effects are impossible for Magic cards, and the Magic finance market will not respond similarly, if at all.

 

Seven speculative scenarios

Having said that there is no effect on card prices right now, and they are not likely in the future, why not speculate about it anyway. Just for the heck of it? If Corona teaches us one thing, it is that people are not easily comforted and love to speculate about risks and remote possibilities.

I will share some of my (farfetched) speculations below. Let's indulge ourselves!

 

Scenario 1: card prices go up due to investments

Instead of going down, card prices might go up instead. Let's speculate that there are some stock brokers out there that play Magic too. Or just some individuals that have a stock portfolio. Seeing the plummet coming, they sold their stock and now sit on a gold mine of money that they would love to invest in something that is not affected by the stock market that much. They don't choose gold, government debt or art but Magic as a good place to put (part) of their money.

If this would happen, we could see card prices going up. Most likely candidates would be reserved list cards, with low stock and a high possibility of retaining or gaining value. Dual lands, power 9 and staples from Legacy and Vintage might be good candidates for this. Foils of popular cards could be a target as well, just like more special printings of cards like promos, invocations etc.

The chances of this happening is very, very low. There are better alternatives around to invest the money. On top of that there's the fact that Magic cards are actual, real-life possessions that need to be shipped, stored, valued, sold and shipped out before getting any profit out of them. It is quite a hassle, compared to the mainstream alternatives. And one would need quite some knowledge about Magic to know what cards are valuable enough to invest in. And maybe Magic is a cornerstone in our lives, not so much in that of others. There are plenty of other collectibles that people could invest in, Magic is just one of them.

 

Scenario 2: digital surge due to lockdown

Italy has been locked down. They are restricted to move and when outside, they must keep 1-meter distance between others. It is safe to assume that local Magic tournaments will be canceled. Let's assume more European countries are locked down. And regions in the US as well.

Where could Magic players go when they are unable to play? MTGA and MTGO are good options. Those platforms might attract players that don't play much digital Magic, and might attract new players. What if those players stick around after the crisis and get their fix of cardboard crack online instead of in an LGS?

That could possibly affect the demand of paper cards in the long term. Less demand with an equal supply means that prices will go down. Online prices on MTGO would go up and if MTGA is affected is up to Wizards.

This scenario is very unlikely too. Paper Magic is above all a social thing. It's the gathering part that makes the big difference. It's a game you play with other people that share your enthusiasm and love for the best tabletop game in the history of the world (at least, that is what I think). Sure, there are people in Magic that are not that social. But don't underestimate the value of participating in a social setting through a game for more introverted people. Not everyone is comfortable with small talk or interaction because of the interaction. Magic is a way for more introverted people to have fun and meaningful interaction with no questions asked or special attention. Digital platforms are not a replacement for that. Same counts for all Magic players that play the game to meet others and have a ton of fun.

Introverts and extraverts alike will crowd back to LGS's when the crisis is over. They might use the digital platforms too, but for many people this is not a total replacement for tabletop magic.

 

Scenario 3: temporary dip due to lockdown

No play at LGS's in case of a lockdown might cause a temporary dip in card prices because people don't trade or buy cards as easy as they did before. With less demand, prices will go down.

But what would Magic players do when they are in lockdown and have a lot of time on their hands? Hmm.. I wonder. Tinker with new magic decks maybe? Brew like they have never brewed before? Sort their collections? Make new wanted lists? Probably. And don't forget about online shopping. You can easily buy and sell cards online. As long as the mail gets delivered, shopping for cards continues.

This is one of the scenarios that seem likely. But aside from that, I don't think it will happen, as I firmly believe that people will spend more time on Magic in lockdown, and not less. And, this could only happen when we assume there will be a long enough lockdown to affect card prices at all.

 

Contamination
Elixir of Immortality
Sicken

 

Scenario 4: Lockdown leads LGS's to sell cards

Again, a lockdown scenario. With people unable (or unwilling) to visit their local LGS, cash problems could arise for those stores. Less attendance means fewer sales and this poses a risk for store owners. Owning a LGS has an upside too, compared to other 'brick stores' around: it's very easy to sell cards online and ship them through mail. LGS's with cash flow problems, could feel the temptation to start selling cards to stay afloat. Since those stores already sell cards on a daily basis, they would need to offer better deals to generate more sales. Lowering prices is a way to do that. As listings change online, so does the AVG price for cards.

This could turn out to be a realistic scenario, if big lockdowns will be enforced in the US. But I believe that a dip in prices would be a temporary thing. Let's say that a lot of LGS's start selling their Dual lands for cheap, just to stay afloat. This could lower prices and tempt other people to start selling their cards as well, to be ahead of the downward curve. Selling early means selling for a higher price. But at the end of the day, or let's say summer, Volcanic Island (IE) is still one of the most sought after cards and the same variables that influence its price are still in place. A lower price will increase demand, and prices will soar again. Looking at it in a long term perspective, your duals will retain their price and will probably increase in value over the coming years.

Also note that the world is bigger than the USA alone. The LGS-culture is bigger and way more prominent in the US than in large parts of Europe. The US is the biggest market for Magic cards, but not the only one. LGS's selling of their cards would influence prices, but there are other, global factors that will soften the effects too.

Wizards of the Coast and Channel Fireball have already canceled events, and if the crisis continues, more are likely to follow. This could cause a temporary dip too, since some nationwide and international game stores frequent these events. The cancellation might lead to a drop in sales.

 

Scenario 5: Irrational panic selling

We live in crazy times. The weirdest and factually untrue statements have found large numbers of people that believe them, no matter what science or facts say. Fear can be a driving factor for people to express irrational or peculiar behavior, like stacking up on toilet paper because of the virus. In a doomsday scenario, having to wash yourself with water and soap after going number two would be the least of your problems, I imagine. But it doesn't matter. Fear of missing out leads to panic buying.

This could happen to our Magic community too. But in our case it could be panic selling instead of buying. The idea that your cards could be less valuable in the near future, and by selling now you could profit from selling high and buying low, can drive people to panic sell. Seeing others doing this will increase the fear and increase the panic selling.

In this case too, prices will go up after a few months or even weeks. The reason to panic sell is to turn a profit. That means that people sell, to later buy back the same cards, or other cards. Money will flow back into the game. The biggest losers of this could be the LGS's that could face financial troubles because their products are suddenly less valuable.

 

Plaguebearer
Divine Intervention
Healing Salve

 

Scenario 6: Financial Crisis

At MTGStocks.com, we don't have price data from before 2010. So I can't check if the 2008 stock market crash led to Magic card prices falling. If memory serves me right, this did not happen. The financial crisis that followed was around for years. We do have data over those years. Prices have gone up. Especially because of an influx of new players. Demand has gone up, and not down during the last financial crisis, the biggest since the Great Depression of the 1930's.

If Corona leads to a new crisis, I don't expect it to have a lot of influence on card prices. There is simply no precedent for this. But who knows, things might be different this time over. Only when LGS's go bankrupt, individual Magic players need to sell their valuable cards to prevent them from going financially under, a crisis probably has little effect on cards prices. It seems so logical that a financial crisis will result in less spending on Magic and therefor lower card prices, I know. But we have not seen this happen in the last decade.

 

Scenario 7: nothing much will happen at all

This is the only likely scenario out there. Even when the effects of the Corona virus get bad, there will be a time in the coming months that Corona is old news. Even in a worst-case scenario (deaths, lockdown, financial crisis), Magic card prices will most probably be unaffected.

In other words, keep calm, play Magic. But if you are feeling ill, stay home and don't sneeze and hack your way to your local LGS. And for those who go: don't forget your trade binders and be sure to wash your hands!


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