Every week Pete Jahn on PureMTGO publishes an article called State of the Program. It is one of the longest-running and I believe the most popular article series on that site. In the articles, Jahn gives his opinion on the current affairs of MTGO, an overview of hot decks, and provides a list of the most expensive cards in each format and their week to week price fluctuation. At the end of each article Jahn also gives a number, which became the basis for this article.

PureMTGO is sponsored (or owned, I don’t know) by MTGOTraders, one of the largest and oldest bot chains on MTGO. They provide Jahn with the number at the end of each article. This number is the price of a complete playset of MTGO, meaning the price you would pay to buy every single different card (if multiple versions exist, only the cheapest one counts) on MTGO four times from them.

The chart above runs from September 2016 to October 2018. If you own cards on MTGO and these numbers don’t make you gasp, then examine them more closely. At the high point of the curve, right at the beginning, the complete playset went for $29,000. While this seemed to be a bit of an outlier, MTGO playsets cost around $26-28k for an extended period of time in the midst of 2016.

As of last Friday, Jahn puts the value of an MTGO playset at $13,850, just about half of what it was a little more than two years ago.

What happened? Why have MTGO cards become so much cheaper in the last two years? The answers, I believe, are relatively straightforward: Arena and Treasure Chests. Before I discuss their impact and how they answer the question, I would like to dig a little deeper into the history of MTGO to put the recent developments in context. The following chart shows the value of a complete MTGO playset since March 16, 2012 (the oldest data point I have), annotated with some of the most impactful events in that period.

From 2001 to 2012

I started playing MTGO at the beginning of 2003. Legions had just come out. MTGO was a little over half a year old at that point. Back then it was completely unheard of what Wizards was trying with Magic Online. It had been unimaginable ten years earlier that players would spend thousands of dollars on playing cards, but it was absolutely mind-boggling that you could get them to spend their money twice, once on physical cards and once on digital cards. Originally, the general consensus was that it couldn’t be done. Magic Online was bound to fail. It was a time when eCommerce was still a thing of the early adopters. Amazon, for example, was still much more a promise than actual business. Who would spend money on digital objects? Especially when you already spent money to own the cards in paper?

It turns out the product was not only ambitious, but successful. The Leaping Lizard Software-developed product was initially quite stable (at least I remember it this way) and offered a completely unique playing experience. Magic Online was not big—usually a few hundred players concurrently in that time—but it grew and proved that it had a valid concept.

A little later, Wizards decided to take further development of MTGO in-house and immediately stability became a major issue. To be fair, it might not have been entirely Wizards’ fault. MTGO grew, but the infrastructure of the program had apparently been built in a way that could only support 4,400 players at the same time.

As MTGO approached its limit, stability waxed and waned as Wizards deployed patch after patch to mitigate the issue. Eventually, Wizards decided that MTGO had to be built anew, from the ground up. This new version, v3, was originally planned to be launched in 2006, but was delivered in April 2008. Morningtide, the last set to be released on v2.5, delivered an unforgettable experience for all players active during that time. Release events had always been the most popular events on MTGO and as the player base had steadily increased over the years, the server (there was actually only one) was by no means equipped to handle the strain. During the Morningtide prerelease, servers had to be taken down frequently—sometimes without warning—and whenever you managed to finish a Draft without some kind of breakdown it felt like a minor miracle.

Things could only get better with v3, couldn’t they? It turns out Wizards had delivered a disastrous product. It was ugly, lacked core functionality, the UI seemed to make things as hard as possible, and the servers weren’t super-stable either. There was nowhere else to go, though. If you wanted to play Magic online, then this was all you had. Over the years, the client of v3 underwent tons of improvements and I wouldn’t say it was beloved at the end, but when the v4 client went into Open Beta for the first time in September 2012, it was the v3 release story all over again: ugly, seriously laggy with a horrendous UI, and the players were clamoring for v3 to stay online. The v4 client turned out to be so bad that Wizards supported both version for a period of two years before pulling the plug on v3. Interestingly, Wizards seemed happy enough with what v3 delivered on their end, and decided to continue using their v3 server architecture, while the v3 client was replaced with a client that has itself evolved a lot since its launch in 2012.

From 2012 to 2015

My data set starts a little before the first demo of v4. You can see that despite the specter of v4 looming in the background, there didn’t seem to be major concerns about the state of MTGO. The value of the cards increased steadily anyway, which indicated that people generally trusted in Magic Online’s continued existence. This was despite Kiblergate happening in that period.

In case you weren’t around during this time, Kiblergate happened when Brian Kibler played in an important MOCS event, broke the format, and went undefeated in all rounds he played, only to see the event crash one round before the end. Kibler was livid and harnessed his social media presence for maximum effect. The player base chimed in and Wizards was forced to put all events on hiatus. At that point, there were no Leagues on Magic Online and events of various types were the primary way of playing Constructed, so this meant almost a complete stop for Constructed on Magic Online. Some events returned relatively quickly, but new problems surfaced and they were taken down again. It took Wizards almost a year to sort it all out, but despite that, collections didn’t lose significant value in that period.

In June 2013 Modern Masters was released. This was special in that it was the first time an all-reprint product had been brought to Magic Online. Previously there had been Masters sets, but in contrast to the modern versions, these had actually brought cards to Magic Online that were from sets before Magic Online was conceived. Thus, Masters Edition I-IV had not increased the supply of existing cards, but brought completely new cards to Magic Online. Unsurprisingly, prices for Modern staples fell after the Modern Masters cards were spoiled and again as the cards were released, but the drops were comparatively small, and quickly recovered.

In contrast, when Wizards announced the definite end of v3 in May 2014, the anticipation of impending doom triggered a frenzy of selling that lasted for weeks and dropped prices of MTGO cards by about 20%. The crying and complaining didn’t help. The average MTGO player seemed to loathe v4, but v3 went dark on July 25, 2014 nonetheless. And although the complaints about v4 didn’t really stop, collection values were once again restored relatively quickly, which indicates that players accepted the status quo, even if grudgingly.

The Introduction of Play Points

Until 2015 the backbone of the economy had always been event tickets (or tix). The idea is that you need tix to enter every event and tix can never be earned in any way. The only way for new tix to come into the system is when somebody buys them from the store. You might not need to buy them yourself, because you could trade your prize boosters for tix from somebody else, but invariably somebody bought these tix from Wizards of the Coast. This way, Wizards secured a constant stream of income.

In June 2015 Wizards announced the introduction of Play Points, an alternative currency that you could use to enter events. Play Points are similar to tix, the main differences being that they are untradable and that you can win them in tournaments.

For some reason, many players loathed the idea, although at that point the main way of paying out prizes, booster packs, had long turned out to be unsustainable. Originally, MTGO was mainly used for Drafting—Constructed played a minor role. Players Drafted all the time, or played Sealed Deck, and the prize boosters immediately went back into the queues. A few extra Constructed players didn’t cause any problems as a couple of extra boosters could easily be absorbed by the system.

The balance shifted over the years, though, with a more robust Constructed scene emerging. The way that prizes were structured in Constructed events, these events churned out boosters at an astonishing rate. When a new set came out, the Booster Draft queues could still absorb the amount of boosters generated, but when interest in Draft waned, booster supply did not, or even increased as players turned from Draft to Constructed. Invariably, booster prices started plummeting. At the beginning, this happened only late in the cycle, but the problem became more serious over the years. At the end of a drafting season you could usually buy a pack from a bot for less than 2 tix. This in turn hurt interest in Constructed as well, because the expected value of playing Constructed diminished with the falling booster prices. Nobody was happy about the situation.

Yet, players didn’t really seem to understand what Wizards was doing when they introduced Play Points. They panicked and sold out just as Wizards had decided that it was of paramount importance to make the MTGO economy more stable—so important that they even accepted a hit to their own profit. How so? Every Play Point (ten, actually) in the system is an event ticket that does not have to be bought, and every ticket not bought is a dollar that Wizards doesn’t earn.

Players sold out right after the announcement and continued to do so until Play Points went live. It turned out that Play points were not the end of the MTGO world, and in fact the new system was much more stable than the previous one. The economy rebounded and card prizes went up to an all-time high.

Treasure Chests

In September 2016, Wizards announced another big change to prizes and thus the economy of MTGO: Treasure Chests.* As usual when changes are announced, players went ballistic. The thing is, they went ballistic about the wrong thing. Players were furious because they feared that Wizards was cutting down on prizes, which—while tangential to the topic—was not true at all. Prizes were even a little better than they had been.

Predictably, the outcry ebbed quickly, and people started posting pictures of lucky Treasure Chest openings on Twitter. Everybody was happy. What few seemed to realize was that with this change, Wizards was not going to make the economy better by spending their own money. They were actually taking money out of the players’ pockets.

How so?

A part of the value of Treasure Chests comes from the Play Points that are in them, but the larger portion comes from the cards you open. It doesn’t require a genius to figure out what that leads to. If you have the faintest idea of economics, then you know that increased demand generally drives prices up and increased supply drives them down. Predictably, as the supply of almost all cards increased constantly with Treasure Chests, the prices of cards on MTGO went down, and have done so ever since the introduction of Treasure Chests.

This hurts every single person that owns cards on Magic Online.
Every single time a Treasure Chest is opened, your collection loses a little of its value.

You might argue that something similar happens when boosters are opened, but that is actually not the case for two reasons. Boosters impact only Standard legal sets, so your old cards retain their value no matter how many boosters are opened. And redemption also provides an additional, essentially almost unlimited demand for Standard cards, which then vanish from the system. In contrast, additional cards from Treasure Chests need to find buyers on Magic Online and stay in the system forever.

If you take a look at the chart I provided, you can see that the bloodletting started right at the moment Treasure Chests were introduced, and as I said, this loss in collection value is considerable. Just as an illustration: I personally own most of the Modern-relevant cards on MTGO, and the more basic Legacy and Vintage stuff like power, duals, Forces, etc. How much money in collection value do you think I lost in the last two years? More than $4,000, I would say. This comes down to almost $200 per month. As I write this, it is the first time I think about it in this way, and despite being aware of the general trend for a long time, I find these numbers staggering.

Interestingly, this was all not supposed to happen. Back in the day there was a provision in the Magic Online user agreement (or whatever it was called back then), that specified Wizards would only reprint an amount equal to 1% of the amount of product initially released for any given set. This was specifically there to build trust in Magic Online by ensuring that collections wouldn’t become worthless overnight. I don’t know when this provision was removed, but if you look at the current user agreement, you won’t find that anywhere.

As an aside, for a long time there was also a passage about how much time in advance Wizards had to announce when they wanted to terminate Magic Online. I believe Wizards was supposed to notify every user at least two years in advance. What does the user agreement say now?

“Wizards may change, modify, suspend, or discontinue any aspect of the game at any time.”

In case that wasn’t clear enough, the next two sentences reinforce what that means:

“Wizards may also impose limits on certain features or restrict your access to parts or all of the game without notice or liability. You have no interest, monetary or otherwise, in any feature, content or availability of the game.”

Personally I have always given Wizards a lot credit for the way they kept their promise about the Reserved List, and doubled down on it when they realized they had made a mistake by reprinting limited quantities in From the Vault. But when it comes to Magic Online, I would not want to bet too much money on Wizards keeping their promises. When Wizards can change the user agreement at any time and shows a willingness to remove passages that were meant to protect the users, then you have to realize that you are completely at their mercy.

Arena

Right after Arena was announced, you can see a drop in the value of a complete MTGO set of about 15-20% in a matter of weeks. This drop is clearly visible even on top of the already negative trend. You can’t prove a causal relationship to the sudden drop in prices, but it should be logical that the announcement of a new digital Magic platform leads to anxiety regarding the future of Magic Online. The public response was just that anyway.

Just about seven weeks ago, Arena went into the Open Beta stage. The loss of value of Magic Online cards has visibly accelerated since. Again, other factors might be at play here, but as Occam’s Razor suggests, the simplest solution is usually the correct one, and there is a very simple explanation here: People like Arena. While there was a bunch of complaining in the beginning, with tweets like this one being the norm:

Nowadays, we get:

“I love Magic Arena. I didn’t expect to even like it, but I love the whole experience it provides.” -Javier Dominguez

And Javier is not alone. Originally, I observed that Arena had a lot of success with more casual Magic players, like my girlfriend or friends that had retired from competitive play long ago. Most of the pros didn’t feel like Arena was for them, but now Brad Nelson and William Jensen tweet about how great Arena is, and you hear Sam Black and Gerry Thompson say on their podcasts that they really like Arena and much prefer the play experience to MTGO.

If that is the state of Arena, then it should come as no surprise that people are selling out of Magic Online. Why would they maintain two separate digital collections? It’s not even like there is a selling frenzy right now. People just realize that Arena is great and even if they miss some of the formats that MTGO provides, Arena is free and Magic Online is costly. If you are a die-hard Modern fan then you will stay on MTGO, but if you are only there for the Drafts and are not hardcore competitive, then why would you pay $15 for a Draft you could get for free?

People are moving to Arena and consequently selling out of Magic Online, which further depresses prices on Magic Online. This is happening even as Arena is still in the Beta. A ton of important features are not yet even implemented, including simple things such as friends list or a meaningful ladder structure. As Arena continues to get better we should expect even more players to leave Magic Online, which constitutes the second force that drives MTGO collection prices down.

The Future

Wizards promised that Magic Online would stick around and I believe that at this point Wizards believes in their promise. What I do not believe is that Wizards can keep this promise.

The future of Magic Online depends heavily on the future of Arena. As far as I can tell, Arena is already more popular than Magic Online ever was. Generally, you would expect Wizards to maintain the more popular platform and eventually scrap the other, but there is this promise to Magic Online users. But if Magic Online dies despite this promise then we cannot expect Wizards to keep Magic Online on life support indefinitely.

The survival of Magic Online depends on the platform finding its niche. Wizards has described this niche as nonrotating formats and high-end competitive play. How realistic is it that Magic Online can actually claim these niches for itself and survive—maybe even thrive—on it?

As for the nonrotating formats, the most popular nonrotating format by far is Modern. If Modern dies, then Legacy, Vintage, and Pauper alone will not keep Magic Online alive. These formats are just too small. Recently asked about Modern on Arena, the developers’ answer was that this is not a current topic as there are so many other improvements that have to happen first. This is a completely noncommittal answer, but the “correct” answer, if Magic Online’s survival was any priority, would have been, “If you want to play Modern, play Magic Online.” This opens up the door to bring Modern to Arena if the public asks for it, which they probably will. If that happens, Magic Online will die quickly.

Even if Wizards decides to keep the distinction between Magic Online and Arena clear, there is a related way that can spell doom for Magic Online. A relatively hotly debated topic around Arena is what happens to cards on Arena once sets rotate out. The reason for that question is the current lack of any format bigger than Standard on Arena. The answer is—and this is an answer that implies the existence of concrete plans—that when the first rotation on Arena happens in September/October 2019, there will be a to-be-named nonrotating format on Arena, which allows cards from all sets available on Arena.

What will happen if Arena Eternal turns out to be an interesting format? There will be demand for similar events in real life. But there is only so much room for different Constructed formats and the natural player base to draw from would be Modern’s. If Modern stops being popular, that again will be the end of Magic Online.

Is this likely? I don’t want to go too deep into speculation here, but just reflect a second on the current state of Modern. The format has a lot of fun, old cards, but the format also has become the poster child for a high-powered format with little counter play expect for insanely powerful sideboard cards that bring their own problems. Modern is still popular, but at the moment it seems to be popular more from habit and lack of alternatives than from the great game play it provides.

Starting a nonrotating format with Ixalan, the first set on Arena, would make a lot of sense. It would be a format where every set has at least been touched by Play Design. Most of the fun cards from Modern would be gone, but most of them are also the cards that drive Modern’s power level through the roof. Not having access to fetchlands would solve a bunch of problems, mostly importantly the constant shuffling in real life. I could go on, but this is not the focus of this article and the topic is deserving of its own article.

It is by no means set in stone that Arena Eternal will replace Modern, or even be successful at all, but there are arguments in favor of such a format, and as such it is a “threat” to Modern and thus Magic Online that cannot be disregarded.

The other niche of Magic Online is that it is supposed to be the high-end of competitive play, and again I am skeptical that this is a sustainable niche. At the moment with all the infrastructure in place on Magic Online and barely any on Arena things have to be this way, but how will the situation present itself in two or three years?

Arena is successful already, and let’s imagine that it gets as successful as Wizards hopes. This means that there will be millions of players on Arena. There will also be an active streaming scene. Basically, Arena would become an eSport. People following Magic streams or Arena competitions online will in all likelihood have an interest in the real competitive Magic scene and the Pro Tour (whatever it will look like at that point), thus the Pro Tour coverage will see a lot more viewers.

The situation would be that Wizards has millions of players playing their game, Arena, and as these players see the best players in the game they want to compete against those players. What do you tell your players? “It’s cool that you like our product, but if you want to compete against the best players in the world, you have to qualify through this inferior product (MTGO) first.” Is that really what is going to happen? Doesn’t it seem much more likely that when Arena is successful and players ask for a way to qualify for the Pro Tour through Arena that Wizards will deliver? If that happens, Magic Online loses one of the two legs it stands on.

The End of Magic Online

Contrary from what you might expect from the section title I would like to end on a more positive note. I believe that Arena will bring the end of Magic Online within the next couple of years, but that end doesn’t have to be a disaster for everybody involved with Magic Online. With some foresight and a little effort Wizards could create a redemption process that allows for transfer of cards on Magic Online to Arena.

There would be a few things that Wizards would have to work out. For example, there would probably be cards that exist on Magic Online, but not yet on Arena. What do you do with these? I think solutions should exist for most of the problems that would come up, but of course that is easy to say when you are not the one responsible for coming up with solutions that don’t break the system. On the other hand, if Arena is so successful that its player base is at least an order of magnitude larger than Magic Online’s ever was, it seems unlikely that a redemption from MTGO to Arena done slightly wrong could break Arena.

I have no crystal ball. I don’t know if Magic Online will really die within the next couple of years, and if so, whether Wizards will find a solution. What I wanted to point out is:

  • If Wizards respects their long-time, faithful customers, then they will find a way to create demand for the cards on the dying platform.
  • This new demand could reward players who stick to Magic Online until the end instead of punishing them with a total loss of their investment.

Summary

The three main points to take away are:

  • Magic Online cards are constantly losing value and will continue to do so if Wizards doesn’t change the way Treasure Chests work.
  • I believe Arena is a severe threat to Magic Online’s existence in several ways. As players move to Arena, card prices on Magic Online will drop, and they drop faster than they normally would because of Treasure Chests alone.
  • Wizards can choose not to make this development a disasters for players still involved in Magic Online, but they can also choose not to care.

Please keep in mind that this is a contribution to topics that I think need discussing, namely the problems caused by Treasure Chests and the impact of Arena on Magic Online. This is my interpretation of the facts. When it comes to the history of MTGO, what you read is a mixture of what I remember and some gaps filled in with various sources. If something I said turns out to be wrong, be it a “fact” or conclusion, then this is not because I have any intention of misleading you. I put this together to the best of my knowledge and if you think something is wrong and have a source for it, please provide it in the comment section. Thanks!

*At the same time, Wizards announced a much shorter redemption period. Bot owners were furious, but I don’t think this is the reason for the loss of collection value in the last two years. Redemption affects only Standard legal sets after all, and most of the MTGO complete set value comes from non-Standard legal sets.

[Editor’s Note: This article originally misidentified “nonrotating formats” as “Eternal formats.”]