Some Thoughts on Magic Online, Part Two

Last time, I wrote about the recent decision by Wizards of the Coast to replace tickets with Play Points as the primary way that players enter Constructed events on Magic Online. I discussed how the decision was obviously unpopular with most people who play the game, since this is essentially replacing cash prizes with, for lack of a better term, Monopoly money - a currency that only has value within the game itself rather than actual monetary value. I stressed that, in my opinion, this is part of a calculated move to eliminate the ability for players to "make money" by playing Magic Online. Today, I want to discuss why Wizards of the Coast might decide to make such a move.

For months now, people (including myself) have been lauding the success of Hearthstone as the premier example of what an online collectible card game should look like.  But what we seem to have perhaps overlooked is that in Hearthstone, real money only flows in one direction - into Blizzard's coffers. With money, the only things you can purchase are either card packs or adventure-style expansions. And because there is no secondary market and no trading, there's no way to later recoup any of that investment, save for performing well in high level tournaments. Outside of that avenue though, no matter how well you perform in either ranked play or in the Arena, your only rewards are dust (an in-game currency used to craft new cards), card packs, or gold (an in-game currency used to purchase card packs and/or adventure-style expansions). Again, money flows into the game - but it never flows out.

I suspect that Wizards of the Coast may be moving towards such a system. By eliminating tickets and replacing them with another currency that cannot be traded or otherwise sold, you eliminate the ability for players to ever get any money back out of the game. In fact, if Wizards takes the next step and eliminates tickets altogether, they will essentially wipe out the secondary market altogether, since tickets are the defacto way of buying and selling individual cards. Even if trading continues to be an option, without a currency to trade, I am uncertain if online dealers such as MTGOTraders could continue to exist, since their only business model would be to sell individual cards for real money through their website - cards that could only be obtained by purchasing large numbers of packs from Wizards themselves and cracking them all open to resell individually.

This would also, as it turns out, explain why Wizards decided back in early February of 2013 to raise the cost of redemption from $5 to $25. Prior to that, one could conceivably obtain all the cards from a set online, redeem them for physical copies, and then sell the paper cards for a small but decent profit, particularly if you could offset the online costs by skilled play. And while I haven't run the numbers, I suspect it is now much harder to make a profit on such a transaction. This would certainly fit the model of eliminating online play as a method of making money while still keeping their promise to allow players to redeem online cards for paper ones.

Honestly, I hope I am wrong. If this is the direction Wizards is actually going, this is bad news for many of the online vendors who make a living off the Magic Online economy. But it certainly would be following in the success of Hearthstone, and potentially could turn major profits for Wizards of the Coast in the longterm. We shall see.

Some Thoughts on Magic Online, Part One

It's been an interesting summer for Magic Online.

It's been about a year since the permanent transition to version 4 of the online client, a transition that was designed to allow future improvements but also brought with it a great deal of confusion and frustration that ended up alienating a lot of what I would term the casual players on Magic Online. But since that time, the overall experience seems to be getting better. Bugs were addressed, load times decreased, and generally things are working the way they are supposed to, or at least as well as they ever have.

But then last month, Wizards made a major announcement that they were radically changing the way that Constructed events would work going forward by introducing a new currency called Play Points that would exist alongside tickets. Play Points can only be earned by playing in Constructed Events, can be used as an entry fee for almost any event (both Limited and Constructed), but otherwise cannot be traded for or obtained in any other way. Alongside this change, Wizards also increased the entry fee for Daily Events up to 12 tickets (or an equivalent amount of Play Points) while essentially decreasing the overall prize payout (since you were now awarded Play Points rather than tickets). Finally, Wizards also essentially eliminated Daily Events for Pauper, Legacy, and Vintage, replacing them with what amounts to 8-man queues.

Not surprisingly, the response from the online community was overwhelmingly negative, leading many people to sell out and walk away from the game. In fact, some have estimated that in the course of two weeks the Magic Online economy lost 12 percent of its value. And while lots of players are certainly still playing on Magic Online, there is still considerable grumbling about this decision.

If you're interested in the economics behind the decision, how it affects your expected value from an event, or anything of that sort, you'll find plenty of information on that available elsewhere. What I want to explore is why Wizards made this decision, and why players are so upset by it. Actually, I think the reason is pretty simple: Wizards is eliminating the ability to "make money" in Magic Online.

Tickets, as a commodity, have an actual monetary value. They can be purchased for approximately one dollar, can be traded to players or bots for cards, and can even be redeemed for actual money from a variety of different sources. None of these are true of Play Points. Their only value is letting you enter into another event. So even if the only change Wizards had made was to replace the tickets given out as prizes with an equivalent amount of Play Points and left everything unchanged, players would still be upset. It's as if you've gone from awarding cash prizes to awarding Monopoly money. Playing for Monopoly money still might be fun, but it's certainly not the same thing as winning cash.

And it doesn't take a genius to figure that out. Sadly, this means that Wizards probably knew very well that this change was going to be very unpopular. Yet they did it anyway. The more I think about it, the more I am convinced that this is an intentional, strategic move on their part to accomplish a particular goal. But why would they want to eliminate the ability to win actual cash prizes? And what are the potential changes in an economy where what you own in Magic Online doesn't have any actual value? That's what I want to explore next time.