While Magic: The Gathering may be the progenitor of the trading card game genre, card collecting has existed much longer than that. The infamous T206 Honus Wagner baseball card, notorious for being the most valuable baseball card in history, was produced in 1910 as a promotion for the now-defunct American Tobacco Company. Rarity drives this card’s astronomical price, (In 2012 one of less than 200 copies ever made sold for over one million dollars ) as even with the advent of the internet as a means of communication between top-tier sports-collectible dealers and a method of locating these extraordinarily scarce cards, the audience for the hobby of sports-card collecting is narrowed by interest. People who look for this sort of item (and the myriad others at far more affordable price tags) are driven only be a desire to possess something unique; the card does not serve a function other than as a tangible piece of prestige. When it comes to Magic: The Gathering collecting, the market is driven by a unique combination of factors that are difficult to pin down, particularly as they exist or existed during any specific point in the game’s twenty year history.
Unlike baseball cards, Magic cards serve a purpose: each unique card has an irreplaceable function within the game context these cards exist in. While Llanowar Elves and Leaf Gilder might serve very similar functions, they are not only objectively different for their abilities within the game, they are asthetically different, and so contain different sources of appeal to the much broader audience of Magic players. The market is even more narrowly defined for other subsets of players. Out of the approximately 800 new and unique cards printed for the first time each year, it would be a generous year if more than 100 of them were tournament-worthy–that is, they possess the flexibility, power level, and efficiency within gameplay to warrant a slot over the other 15,000 options in someone’s competitively designed deck–how does this model sustain itself? The answer may seem obvious: tournament play does not drive the market. As Aaron Forsythe discussed in a speech given on Magic design in 2012  the casual market is by far the largest demographic in the market for Magic cards, despite tournament players being the most visible and the most vocal subset.
The internet factors into this by not only increasing the awareness of the players and manufacturers to the divide between demographics and interests, but by forcing members of each group to care about the existence of the other. While casual, kitchen-table players might not have batted an eye at opening a Tarmogoyf in the past, magic-finance writers like http://www.quietspeculation.com and Chas Andres have brought the spotlight onto the significant worth attached to Magic cards and left it there. Trading has been revolutionized by the spread of pricing information and the stock-like prices that follow cards attached to the tournament scene, and all the while the collector’s market for these cards continues to move in the background. The royalty of Magic collecting like the Power Nine and Summer Magic remain nearly unaffected in terms of value, but have experienced a drastic uptick in players’ awareness of their existence. Casual-appeal cards that might be of little interest practically to tournament players are now recognized for their value to another subset of the market by finance experts, speculators, and traders alike, while nearly the entire community keeps an eye trained on the progression of new tournaments, waiting for one card or strategy to ebb in popularity as an opportunity to buy in, or hoping for a market speculation made months ago on a fringe tournament player to finally pay off.
In a later blog post I’ll be back with more about the actions of specific retailers, most notably the notorious Starcitygames.com, and their intentions to manipulate the market.
If the language of this post is too vague, too specific, if there’s too much jargon or if you’d really like me to expand on something else, please try to let me know in the comments!