Recent Booster Prices

While Born of the Gods (BNG) release events were running, a steady stream of BNG boosters entered the market from the sealed queues. This influx of BNG boosters into the MTGO economy pushed the price down into the 2.6-2.9 tix range. Since the end of release events about two weeks ago, the price has risen into the 3.3 to 3.4 tix range. At the same time, the price of Theros (THS) boosters has fallen from about 3.3 tix to 3.0 tix.

For speculators, there are a couple of things to chew on here. The dip in price of BNG boosters during release events and the subsequent rise in price was expected. After all, the 16-person sealed queues took in tix only and awarded BNG boosters as (quite generous) prizes. However, the magnitude and the speed of the price increase surprised me.

On the other hand, the fall in the price of THS boosters was unexpected. Although it was a surprise to see that THS boosters, alongside BNG boosters, would continue to be awarded in Daily and Premiere Events, the slightly skewed nature of draft payouts in 4-3-2-2 drafts should have ensured a steady increase in the amount of BNG boosters on the market as well as a steady decrease of THS boosters. Something was happening here and further research would be needed.

The Analysis

Let's start with a few assumptions.

1. The value of a pack mostly comes from its use in draft.
2. THS and BNG packs are consumed in 2:1 proportion.
3. THS and BNG boosters enter the market in a 2:1 proportion.

With these assumptions, we can come up with an hypothesis to test.

The price of THS and BNG boosters should converge over time. To wit, any excess supply of THS or BNG boosters should get consumed over time, and their prices should move closer together.

But, we are seeing that the prices of these two boosters are in fact diverging. This means that our hypothesis as stated is incorrect. In order to further the analysis, we are going to have to closely examine our assumptions for their veracity.

Going Down the List

The first assumption has some available evidence to support it. Check out the expected value (EV) calculations over at MagicEV. A booster of THS has an EV of 0.74 tix, meanwhile a booster of BNG has an EV of 1.19 tix.

Comparing the EV to the price of given pack, it's obvious that most of the value of a pack comes from what is used for, i.e. drafting. If packs were valued just for their contents, then we'd see lower prices in the market.

The second assumption has anecdotal support, but otherwise is hard to prove or disprove. However, I don't know how many people are interested in burning over 2 dollars per booster of digital objects. I think it's safe to say that packs rarely get cracked online outside of draft queues and other Limited events.

The third assumption seems to be the weakest. Further exploring how boosters enter the market should give some insight into this problem.

Closely Examining Booster Prizes

Let's start with the draft room, where a lot of packs are handed out every day. For both Swiss and 8-4 THS block draft, overall prizes are awarded in a perfect ratio of 2 THS boosters to 1 BNG boosters.

If you finish 3-0 in Swiss, you get a draft set. If you finish 2-1, you get one each of THS and BNG. If you finished 1-2, you get a booster of THS. With one person finishing 3-0, three people finishing 2-1, and three people finishing 1-2, then 8 THS boosters and 4 BNG boosters are awarded. Eight draft sets go in, four draft sets come out.

8-4 drafts are even easier to parse. First place is 5 THS, 3 BNG, 2nd place is 3 THS, 1 BNG--again eight draft sets go in, four come out. Therefore, we can conclude that both Swiss and 8-4 THS block drafts will have no impact on the relative abundance of either booster in the secondary market.

4-3-2-2 Queues

Then there's the matter of 4-3-2-2 queues. These drafts are a little skewed as they award a total of only 11 boosters. Third and fourth place both get one each of THS and BNG. Second place gets a draft set, while first place gets a draft set plus one THS.

Overall, 7 THS and 4 BNG are awarded. This payout will slightly devalue BNG boosters over time as players will more often need to buy a booster of THS to complete their draft set. This is the first, albeit small, strike against the third assumption.

Daily Events

Next, let's look at Daily Events (DEs). For a THS block sealed DE, if you finish 3-1 or 2-2, the prizes are in a 2:1 ratio of THS to BNG boosters. But, if you finish 4-0, you will get 9 THS boosters and 3 BNG boosters. In this case, the 4-0 players are left with three excess THS boosters. This excess supply will devalue THS boosters on the Classifieds over time.

This is the second strike against the third assumption but notably it runs counter to the 4-3-2-2 payouts in that the excess booster is THS rather than BNG.

For a Constructed Daily Event, a record of 4-0 gets you 7 THS boosters and 4 BNG boosters, while those going 3-1 receive 4 THS and 2 BNG. Unlike sealed DEs, Constructed DEs will award a slightly higher percentage of BNG boosters. Given the fact that Standard DEs are by far the most popular DE (often filling to capacity in advance of the event itself), this suggests that the prize payouts for Daily Events overall are roughly balanced.

With DE payouts roughly equating, to me it's doubtful that the skewed payout of 4-3-2-2 drafts would be enough to affect prices over time. The recent observed price changes have been too rapid for the slow leak of one THS booster per draft.

Constructed Queues

The last spot to look in an attempt to discredit the third assumption is in the Constructed queues. For all eight-person Constructed queues, prizes are such that 8 THS boosters are awarded compared to only 4 BNG boosters. This payout devalues THS boosters relative to BNG boosters.

Next, the two-person Constructed queues only award THS boosters. Now we are getting somewhere. Every eight-man and two-man Constructed queue that fires is putting more THS boosters into the market relative to BNG. So far, the biggest leak in our assumption seems to be coming from the Constructed queues room.

Next, we should try to get a sense of the relative magnitudes involved here. Last night I took a sample of events from around 6 pm EST to 8 pm EST on MTGO to get a feel for what was happening.

From 6:11 pm EST to 7:54 pm EST, 26 eight-person Constructed queues fired. That's roughly 15 queues an hour.

From 7:06 pm EST to 7:59 pm EST, 45 two-person Constructed queues fired. This is about 50 queues an hour.

From 6:06 pm EST to 8:01 pm EST, 23 Theros Block 4-3-2-2 queues fired. This is about 12 queues an hour.

So for every hour during this period last night, eight-person Constructed queues awarded 120 THS and 60 BNG, two-person Constructed queues awarded 50 THS and 0 BNG, and then the THS Block 4-3-2-2 queues awarded 84 THS and 48 BNG. Overall, the ratio of THS to BNG in this (admittedly small) sample is 254:108 or about 2.35 to 1.

Conclusion

I think we have our culprit. Eight- and two-person Constructed queues award a high proportion of THS relative to BNG. Also, the Constructed queues fire at a much higher pace than the 4-3-2-2 queues.

The caveat here though is that Cube draft and Mirage Block draft went live last night, meaning the 4-3-2-2 queues might be under represented in this sample. Nevertheless, based on this sample, in order to get the prize ratio down to 2:1 between THS and BNG boosters, the rate 4-3-2-2 queues would need to fire at would have to more than quadruple, from 12 queues an hour to 50.

I think it's safe to say the third assumption is incorrect, and that the hypothesis needs to be revisited. Our third assumption should read something like the following.

3. Relative to BNG boosters, more THS boosters are awarded as prizes due to the popularity of on-demand Constructed queues.

The hypothesis would then read:

Over time, THS and BNG boosters will diverge in price as BNG becomes relatively more scarce and THS relatively abundant.

This new assumption, backed up by analysis of a small sample of data, supports the hypothesis which lines up with observed price trends. It's interesting to note that the additions of an extra QP to the winner of eight-man Constructed queues probably spurred this change in the MTGO economy.

Plan of Action

For speculators, this means that we can expect BNG boosters to continue higher and for THS boosters to continue lower as long as the conditions described above remain the same. I'd expect these conditions to be in place until the release of Journey Into Nyx (JOU). At that point, demand for Constructed queues should fall, and we will get a new prize structure with the addition of JOU boosters.

If you are holding a relatively large amount of THS boosters, as I am, it would be time consuming to flip THS boosters for BNG boosters at this moment. Also, the gains would probably be minimal. I think we'll see BNG boosters level off in the 3.4 to 3.6 tix range, and THS boosters level off in the 2.5 to 2.8 tix range.

My plan is to hold my THS boosters until the release of JOU and then see how the prize structures change. I'd expect a more favorable environment for price gains on THS in May and June.

For next year, if the block structure is again large-small-small and the prize structure is the same, there will be a nice short-term opportunity on the middle block boosters during release events. The recent jump in BNG boosters from 2.7 tix to 3.3 tix was a good speculative opportunity worth noting for the future.