Major retailer's irrational exhuberance-Commander singles

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chaosdjinn
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Major retailer's irrational exhuberance-Commander singles

Post by chaosdjinn » Wed Jun 15, 2011 4:29 pm

A major retailer(I'll leave you to figure it out) is pre-selling singles from the upcoming Commander Decks for very high prices. Now, I've been in the game a long time and have dealt with this retailer before and, although I see them, and respect them, as the top-end of the pricing pyramid, to see them doing this with this specific product is highly disconcerting for a number of reasons.

1. The first being that Commander Decks have been verified to be in print and will be printed to demand for the forseeable future (as per Elaine Chase- on twitter). A FTV product, which is known, from day one, to be limited in production, this product is not.

2. MSRP is 29.99 for each deck and, based on a metric of reasonable profit built in by WOTC, that ends up being an approximate cost of @$18-20 (if not less) to the retailer before they sell the product. Specific cards in this set are being sold at or above cost to the retailer of the entire product(presale costs of 17.99 for specific singles is the speculative ceiling of prices based on their front page; up from 14.99 that was posted last night for the specific high-priced singles).

3. The secondary market, though not the focus of WOTC, is being fleeced for profit margins well above the recommended margins suggested by WOTC's MSRP of this new, yet to be released, but known to be available for the forseeable future product.

4. The occurrence of this situation does not bode well for the integrity of secondary market prices. Speculation by middlemen has caused turmoil in the greater stock and housing markets and, I am afraid, may eventually wreak the same havoc in MTG economics. The unfair advantage this particular retailer has over market economics regarding WOTC's product makes them not only the originator to the public, and more importantly, to the public perception of perceived value, but also grants them skewed leverage with their power as they also function as a middleman; thus allowing them near monopolistic control over initial speculative perception, pricing and ill-gotten gains(I always wanted to use that card's name in reference to MTG economics :-D ). Practices such as these cause unnecessary turmoil in the pricing of the initial realease of this product. That power is, to informed consumers, wrought with negative consequences for us, the consumers, and the secondary market we need to have confidence in as a function of our affiliation with the game.

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Post by psrex » Wed Jun 15, 2011 5:35 pm

I don't think that things are as dire as you predict. I think that it's simply that there is a higher demand than was expected, and the initial printing is expected to be used up quickly. I think that everyone knows that there will be lots of product for the long term, but some people want the flashy new cards right away (as with every set or promo). Those that are impatient are the only ones that are paying the higher prices.

Once Target, Wal-Mart and non-gaming stores (for me that's Newbury Comics) are able to keep the product in stock I expect that prices will go back down to reasonable levels. In 6 months I'm guessing that none of the rares from a deck will be more than $6.

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Post by chaosdjinn » Wed Jun 15, 2011 5:39 pm

psrex wrote:I don't think that things are as dire as you predict. I think that it's simply that there is a higher demand than was expected, and the initial printing is expected to be used up quickly. I think that everyone knows that there will be lots of product for the long term, but some people want the flashy new cards right away (as with every set or promo). Those that are impatient are the only ones that are paying the higher prices.

Once Target, Wal-Mart and non-gaming stores (for me that's Newbury Comics) are able to keep the product in stock I expect that prices will go back down to reasonable levels. In 6 months I'm guessing that none of the rares from a deck will be more than $6.
Next time I'm up in Essex, Mass., I'll stop by Newbury Comics with my brother-in-law. I stopped in one Friday a few years ago well after the FNM started. Nice place. I was in Mass. for the Coldsnap pre-release party somewhere around there(forgot where he lived at the time- store was on a main street on;ly a few miles away from Newbury comics).

My concern with the commander decks is that people will spend money on cards unintelligibly. Which, in the long run, when prices deflate, will only leave a sour taste in their mouths and confidence in the accuracy of the secondary market will weaken.
Last edited by chaosdjinn on Wed Jun 15, 2011 8:27 pm, edited 1 time in total.

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Post by Gryfalia » Wed Jun 15, 2011 6:41 pm

We'll just be selling them for $32 (tax is included in our price, so that's technically slightly cheaper than $29.99 with sales tax). Now the Japanese ones..well..that might be different, but since I'm keeping at least a set of those myself, plus another set is completely called for, I probably won't have any spare anyway..hehe.

A short-term price hike on an evergreen product is...stupid..
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Post by Alien_Starfighter_Pilot » Wed Jun 15, 2011 7:45 pm

The way I understand it, the highest demand for cards is when a set is immediately released, and then all cards go down in value a bit as more product becomes available.

it is this initial sales period that the singles retailer makes their money, so while I can agree that some cards are way over-priced, I understand why it is so.

there are people out there that will pay those prices to have those cards, validating the pricing of the cards.

There's nothing stopping the person from just buying the decks themselves if they'd spend as much (or more) buying the singles from that deck.

my two cents.

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Post by chaosdjinn » Wed Jun 15, 2011 8:19 pm

Very valid explanation which is totally understood by me when it comes to randomized product. However, it is unsettling nonetheless to know a preconstructed product will be broken to sell a single card at 19.99* when, in a few months, the price will most likely experience a severe depreciation from market saturation. Effectively neutering any collectibility inherent in said product(i.e.- value of purchase to hold steady and/or gain over time). Long-term devaluation on a mass scale through the fleecing of the uninformed purchaser of the single card at 19.99 impacts the whole notion of the secondary market as it leaves us wondering "how could I trust the singles card market prices?"

*the prices on the top end cards went from 17.99 to 19.99 on the site within the last hour.
Last edited by chaosdjinn on Wed Jun 15, 2011 8:31 pm, edited 1 time in total.

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Post by chaosdjinn » Wed Jun 15, 2011 8:28 pm

Gryfalia wrote:We'll just be selling them for $32 (tax is included in our price, so that's technically slightly cheaper than $29.99 with sales tax). Now the Japanese ones..well..that might be different, but since I'm keeping at least a set of those myself, plus another set is completely called for, I probably won't have any spare anyway..hehe.

A short-term price hike on an evergreen product is...stupid..
I commend you and your store for not fleecing your constituents as others are obviously doing.

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Post by mystical_tutor » Wed Jun 15, 2011 9:05 pm

chaosdjinn wrote:I commend you and your store for not fleecing your constituents as others are obviously doing.
As do I. Also my thanks to the other stores that will sell for MSRP. The scalpers (no matter how big their store is or how popular their name) earn my contempt quickly and terminate my business with them.

It is too bad the Magic public can't reign in their "gotta show off" ego a bit and learn from the past...

What does Charizard or a booster of first edition Pokemon sell for now days anyway?

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Post by axcel » Wed Jun 15, 2011 9:57 pm

While I don't like very much the procedure of selling singles for these prices, I just want to point out that they do it, because there's people willing to pay the price. And if somebody wants to pay $20 for a single cards from $30 100-card box, it's their own stupidity (or other reasons, but this seems prevalent). If I needed a single, I'd just buy the box and sell the remaining 99 cards, likely with a profit. But if somebody likes to waste money, why not let them? After all, even though I have no idea about economics, I remember that demand creates supply. Major Retailer's action is just answer to this demand. Surely prices will go down when the dust settles after initial excitement.

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Post by caquaa » Wed Jun 15, 2011 11:03 pm

chaosdjinn wrote: My concern with the commander decks is that people will spend money on cards unintelligibly. Which, in the long run, when prices deflate, will only leave a sour taste in their mouths and confidence in the accuracy of the secondary market will weaken.
this is true w/ anything released by wotc. Any time a new set comes out prices are fairly high on everything, then drop. As a set, the highest prices obtainable for the cards in total are during presales. I purchased a bunch of shadowmoor during presale and I picked up some hot cards like Cemetary Puca... yup, paid $5-8 or whatever for a playset of bulk rares. if people want to be smart about it and get the most for their money they don't buy things during presale. If you go out and have to have it now, then you know what you're getting yourself into.

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Post by Blood » Thu Jun 16, 2011 4:35 pm

While I do not like when the stores gouge people, I can not blame them for getting the price they can get for their product. I think it is irresponsible for a person to expect a store to sell for less when they can get more for it. If starcity can get $19.99 for a single from a set you can buy for $29.99, more power to them. If we were talking about a very small released product, then you could make a case that price setting would be somewhat immoral, even though I do not think it is, but a product that will be very widely available being set high, people are just being irresponsible and paying stupid prices because they want them first.

Basically I am saying if your house was on the market for $100,000 and someone came and said i'll give you $150,000 for it, would you say no?

If starcity can get $19.99, why should they sell for $5.99?

I also would like to make my main point be: Everything in life that is for sale, people pay more for to be the first ones to own it. I am not sure why you think magic should be different. Do people who buy PS3s or new iphones or new cars get mad in a year when they could have got the iphone for $100 less? No they realize they are paying more for the rite to get it first, and to use it for that year. The same is for magic. You can easily buy Fire and Lightning, Slivers, Phyrexia vs the Coalation (even the Garruk and Elspeth if you look hard enough) decks below retail. Are the people who purchased these in the beginning mad?

edit:formatting

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Post by chaosdjinn » Thu Jun 16, 2011 4:58 pm

I guess when it boils down to it, we can argue the 'finer' points of capitalism, supply side economics, and the idiocy of most American consumers to short-change themselves to feed their insatiable abyss with ego-inflating materialism all day. However, I'm not here to do that- just here to point out that a healthy secondary market for our game is something I want to keep intact.

The major retailer's aims of secondary market domination (look at their Legacy buy list prices) reverberates throughout the values of cards in the long run- from in-print to promo; artificially inflating the market and having it crash negates the collectibility component for everyone- players and collectors alike.

Opportunism in capitalism is as old as capitalism itself; When it comes to inserting that greed into a collectible of any sort, please reference the collapsed markets of the past few decades regarding baseball cards, comic books, pokemon stuff, beanie babies, etc. to see what future I do not want to see for our game.

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Post by hammr7 » Thu Jun 16, 2011 5:30 pm

I don't deal with current releases, so can't comment on the cards or the higher prices.

But the bubbles you reference, except perhaps pokemon, were missing one component important to Magic. Magic cards can be played, and it is the playability that has always dominated pricing in Magic. Collectors like me are something of an afterthought for all but the oldest sets or the rarest promo cards.

I love baseball, have collected baseball cards, and am intimately familiar with that particular bubble. The bubble collapsed because of overproduction by three competing companies (Topps, Fleer and Donruss). It got to the point where these companies were producing dozens of sets per year for each collector. The huge excesses of available cards eventually diminished the prices for all cards. The same thing happened with Beanie Babies and much of the Pokemon stuff.

In the Magic situation you are describing, it doesn't appear that Wizards is upping production significantly; rather that some cards might be good for players and not enough of those playable cards will be available for all players who want them. Like many Legacy staples, prices rise because demand exceeds supply.

If the retailer's plans backfire, and the cards are not that great (like Homelands, so many years ago), the retailer will take the hit. If the retailer can't sell cards at the inflated prices, they will likely buy less, allowing their competition to garner more sales. If Wizards is somehow complicit it will come back to haunt them in future sales.

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Post by magic-belgium » Fri Jun 17, 2011 12:35 am

chaosdjinn wrote:I guess when it boils down to it, we can argue the 'finer' points of capitalism, supply side economics, and the idiocy of most American consumers to short-change themselves to feed their insatiable abyss with ego-inflating materialism all day. However, I'm not here to do that- just here to point out that a healthy secondary market for our game is something I want to keep intact.

The major retailer's aims of secondary market domination (look at their Legacy buy list prices) reverberates throughout the values of cards in the long run- from in-print to promo; artificially inflating the market and having it crash negates the collectibility component for everyone- players and collectors alike.

Opportunism in capitalism is as old as capitalism itself; When it comes to inserting that greed into a collectible of any sort, please reference the collapsed markets of the past few decades regarding baseball cards, comic books, pokemon stuff, beanie babies, etc. to see what future I do not want to see for our game.
I couldn't agree more. Besides, WotC recent policies to increase margins do not help the market either...

MTG has had ups and downs. At the moment they sell a lot, but they flood the market with tons of products. Let's see if the buyers will follow.

MTG has become a very expensive hobby, and I'm not sure it is a good thing in the middle of a major economic crisis.

I would like to say a few words about "paying more to get products first.

When you buy a car, the price drops after a few months because it becomes second hand, and a car does not last eternally. Its value must decrease.

When it comes to phones, computers... Technology is involved, and the trend has always been : more power for less money all the time. Prices have always decreased.

Speaking of MTG cards, no technology is involved, the aspect of second hand is not comparable to cards... So it can not be said that "the first ones may pay more". Especially when a product is not at all limited...

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