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As you're all well aware, there are lot of things that MTGO could stand to improve. There are bugs, strange features, and a very weak pack economy. They fixed the Oblivion Ring loop though!
If you weren't aware, there used to be problems with empty boards and Oblivion Rings, as evidenced by LSV in this hilarious video. This video shows that the issue has now been fixed.
It's good to see that they're working on improving functionality, though this is hardly the most impactful update that could have been made. As financiers, I'm sure we'd all much rather see the issues pointed out in Henry Druschel's piece on the MTGO economy fixed. For now, we can only hope that this level of exposure will help.
I’m not sure of Druschel has considered what switching to Play Points would do to the MTGO economy. I think there is a substantial number of players that grind DEs for boosters and then tix and then US$. The ability to earn US$ can be very attractive depending on your local wages and the exchange rate of your country. Here are some examples of hourly wages outside of the US.
Hourly wages in Ecuador stand at US$2.48, while in Peru it is at US$1.32 and Colombia US$1.63.
This content was originally published by teleSUR at the following address:
http://www.telesurtv.net/english/news/Ecuador-Inc….
So, if there are places where playing MTGO can be close or better than minimum wage, grinders will do it. Grinders playing constructed and reselling boosters drives down the price of boosters over time.
I think that the change to the redemption fee was a tax that accelerated this process of lower booster prices over time via grinders. The higher redemption fee means that boosters start out at a lower value, due to the lower value of the contents. But it’s the grinders that drive down the price of boosters as they seek to extract value from playing MTGO. A lowered redemption fee would just change the level of where boosters value starts at, but grinders would still be grinding down the value over time.
The switch to play points would remove the ability of grinders to earn cash through constructed events. They would have to use the play points they win in constructed to draft and then sell the cards they draft for tix/US$.
I think this would make MTGO less attractive to grinders as drafting is inherently less predictable. Less players -> less demand for constructed -> less volume of cards moving from MTGO to paper. Depending on the number of grinders (which we can only guess at), this change could crash the MTGO economy.
Fixing the price of boosters through play points might have large, unintended consequences. If grinders are a small percentage of the total player base, then it won’t matter as much. But if there are a substantial number of grinders relying on MTGO for an income, a move away from awarding boosters would cause a big shift in the MTGO economy.
There are so many things I don’t like about that Druschel article that is trying to explain the MTGO economy. As a general rule in economics: if you think you have some kind of closed form understanding of an economy, you are probably dead wrong.
He says the $25 fee is causing an “unhealthy” economy. There will always be some transaction cost when redeeming an online set, (eg. time, convenience) so whether there is a fee or not, nothing is fundamentally changing here.
He also says something about a problem being created by a lack of interest in the current draft format, making it so that there is a lower demand for packs. I think this is the wrong way to look at things. I think the price of a pack will always reflect the average price of the cards that you can open in that pack. Therefore low pack prices are created when there is a large supply of cards relative to the constructed demand. This in turn will make both draft and constructed less desirable in terms of the prizes awarded (although it will be easier to build a deck for constructed).
Just like in paper magic, there is no “magic fix” to the market for cards, and when someone describes what to them is a healthy vs. unhealthy economy it all feels extremely arbitrary to me.
If you really need it to be that pack prices don’t fall below some specific threshold, I think the only real solution is to somehow limit the amount of cards that are being opened (physical or digital) relative to the number of people that need cards for constructed play.
Assuming you can only give out prizes in the form of packs, this means you must either limit the amount of tournaments being run, or limit the amount of packs that can be bought directly.
I guess what’s missing in my analysis is that the “fun” you get from drafting a pack can make it worth more than the expected value of the cards inside of it. I think this value is extremely small online, though, and should be near negligible.
I’m not advocating Druschel’s fix, merely stating that the problems he identifies are relevant.