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Way back in 1999, when some were still in peak preparation mode for Y2K, Hasbro acquired Wizards of the Coast for $325 million. At the time, the company was basking in the fresh success of Magic the Gathering, Dungeons and Dragons, and its license to sell Pokémon cards.
All these years later, Wizards is still a phenomenon led in large part by Magic, but things are changing.
From 1999 to 2021, Wizards operated as a distinct subsidiary of Hasbro. It was only a couple years ago when it became a formal division of the company: Wizards of the Coast and Digital Gaming. Diehard fans - and equity analysts - haven't been thrilled with the change.
Hasbro is a publicly traded company, meaning there are revenue and earnings targets to hit. Some feel that those targets may be driving the company to milk the Magic cash cow more frequently than ole girl can handle. Back in November, Bank of America analyst Jason Haas suggested that Hasbro was diluting the MTG brand by packing the release calendar, creating fatigue for consumers as well as secondary market malaise.
2022 saw the release of 39 MTG card sets, up from just 15 in 2019. There's data to support a fatigue hypothesis. In the first half of last year, $22.2 million in MTG individual cards changed hands on eBay, with an average price of $18.77. In the second half, overall volume was up to $24.2 million - this is when the release schedule was most active - but the average price fell to $17.95. In the first few months of 2023, the average is down further still to $17.19.
A high single digit percentage decline is far from uncommon in the market environment of the last ~9 months, and Hasbro has been eager to dismiss the suggestions of dilution. Executives attribute 2022's crowded release schedule to supply chain issues which should normalize this year, while also noting that most cards are printed to demand, downplaying notions of "overprinting".
Magic became a billion dollar brand in annual revenue last year, a number that will blow away those unfamiliar with the success of the franchise.
Still, anecdotal evidence of fans, collectors, distributors, and retailers becoming disenchanted with Hasbro's strategy is mounting. Frustration was most palpable with the company's decision to release a 30th Anniversary reprint of some of the game's most iconic original cards. For $1,000, fans could purchase a set of four booster packs containing 15 cards apiece. To many, this was peak dilutive activity catering only to the most wealthy.
Despite any frustration, the true iconic cards, particularly those from 1993, remain the subject of intense demand. Over the last two years, the MTG cards tracked by CardLadder are up over 32%, falling by less than 5% in the last year. Those figures compare incredibly favorably to other card collecting pursuits in sports, culture, or elsewhere.
In fact, just last week, PWCC notched the most expensive MTG card sale of all time. The fabled Black Lotus in PSA 10 condition (one of just six to earn that distinction) sold for $540,000. That bests the prior record of $511,100, set in January of 2021 at PWCC, for another first print PSA 10 Black Lotus.
Get this: both of those assets were signed by Magic artist Christopher Rush...on the slab! Not on the card itself. On the plastic PSA holder in Sharpie. That means the card effectively can never be reholdered without losing any incremental value from the signature, and the label can't note that the signature was authenticated....unless they put the slab in...a slab?
Slabception. Not sure if even Christopher Nolan could wrap his head around that one.
The only other high-value example of this wild practice we could find was a PSA 10 No Rarity Charizard Holo signed on the holder by artist Mitsuhiro Arita. What is it with you TCG people?
!In sports, examples fetching bigger money are almost non-existent. One of the only ones we could find was a PSA 8 1986 Fleer Jordan sticker that MJ signed on the holder. That was included in a case with an Upper Deck COA - basically a DIY slabbing. It sold for $3,120 in 2021.
Long story short, if you're seeking an auto, best to find another item or remove the card from its slab first...unless you run into a trading card game art icon, in which case you can apparently have no qualms in asking them to scrawl their John Hancock right on the plastic. And really, you can't blame owners of a PSA 10 Black Lotus for refusing to tempt fate by removing it from the pinnacle of TCG holders.
Critically important slab-signing digression aside, while recent Hasbro strategy may be diluting more recent releases, it seems the original collecting grails are in good stead. With so much change currently unfolding in the world of trading card manufacturing, licensing, and distribution though, the situation bears watching to see if the Magic ultimately wears off.
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