Would it be safe to say mtgo is contingent upon people believing things are worth money?

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I'm trying to explain the mtgo economy to someone who didnt even know what magic was, and the part they're having trouble with is why people pay money for digital objects if wotc doesn't give any kind of cash out option. I explained they can't for legal reasons(though I'm not sure they'd even want to if they could, haven't really thought about it enough). Anyway I went through how tickets work and how from a legal standpoint, their only use is to enter events even though we use them as a de facto currency, and how there are bots breaking them up into fractional credits etc, stuff we all know.

What I'm asking of you kind people, is while I'm sure there are people who would still pay to play the game if there was never any hope of getting cash back out of the game, is the fact that people believe it's possible what makes it possible? 

 
I heard we're supposed to post in green if we don't like the new forums.
MTGO does have a cash-out option.  If you collect a full set, you can opt to trade it in for a set of real cards.

@mikemearls The office is basically empty this week, which opens up all sorts of possibilities for low shenanigans

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@biotech66 aren't you the boss anyway? isn't "DO IT OR I FIRE YOU!" still an option?

@mikemearls I think Perkins would throat punch me if I ever tried that. And I'd give him a glowing quarterly review for it.

OH yeah i forgot about that what a dummy I am haha.
I heard we're supposed to post in green if we don't like the new forums.
You could say the same about any fiat currency too, and people are still willing to be paid in dollars.

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I'm trying to explain the mtgo economy to someone who didnt even know what magic was, and the part they're having trouble with is why people pay money for digital objects ...



Ask that same person if they really think their bank has every dollar (euro, whatever) their bank accounts say they do in hard currency.  Then ask them if the world came to an economic end tomorrow, whether they think little printed pieces of paper could be traded for actual goods or services

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Right but the idea of money and banks has been around alot longer than anyone alive has been so it's alot more accepted to someone who's never heard of magic let alone magic online. It's fine though redemption is enough of a reason i think.  I can't believe I forgot about redemption...barely play anymore
I heard we're supposed to post in green if we don't like the new forums.
Ask them how much they pay for a trip to the theater, or perhaps monthly cable, internet?  Sometimes in life you pay for entertainment.  How much you pay depends on how much you value the entertainment.  The best part with mtgo is it is a pay as you go and even has a couple ways to recoup some of what you invest should you at some point desire to do so.


ask them if the world came to an economic end tomorrow, whether they think little printed pieces of paper could be traded for actual goods or services

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The fact that you can redeem full sets is basically the only thing propping up the value of cards on MTGO.  Otherwise, there would be far more copies of each individual mythic and rare floating around than what is needed for people who are interested in playing wiht them.
You pay for cards like they were a product, but in fact its a service. Its like any online game with a fremium system. You can play a lot for free (which is also the case in MTGO, minus 10 dollar entry fee) but to get access to the premium quality fun, you have to pay a bit more. MTGO in addition has a system that rewards better players by making things cheaper (or even free) because you get prizes that you can use to play more.

If you set a budget on how much you will spend, say 16 dollars a month, it works exactly like WoW!

Don't think of it as owning stuff, think of it as paying to play. 

As far as practical considerations, yes, you also have the option to convert it to pieces of cardboard which have a symbolic meaning that is, by social norm, more easily acceptable as worth something than its equal representation in a server. 

You can also use paypal to sell cards and decks, similar to how someone would use paypal to sell a high level character or some fancy equipment in an MMO. 
For a great source of information on the Pauper format check out Pauper's Cage!
Even not counting redemption, there definitely is a cash-out option. Over the years, I've had at least two friends stop playing and sell all of their collection for hard cash.

Really, it's all a matter of the concept of "digital objects" confusing people who are not used to it. Digital cards can provide you with the same amount of fun as their paper counterparts, and can be sold in pretty much the same way you'd sell your paper collection.
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The fact that you can redeem full sets is basically the only thing propping up the value of cards on MTGO.  Otherwise, there would be far more copies of each individual mythic and rare floating around than what is needed for people who are interested in playing wiht them.



This is true for any game out there. If there is no "item sink", item prices tank. This does not mean that cards have value in MTGO because they can be exchanged for money, it means cards retain some value in MTGO because cards are being removed from the pool constantly and supply doesn't overwhelm demand.

If there were an ironman format that permanently destroyed every card that went to the graveyard, you bet that would prop up card prices just as effectively.
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Your "item sink" theory isn't entirely true.  You can't compare this to WoW gold or currency in another game.  Cards are a limited commodity (so we'd like to think) and WoTC only prints a certain number of them, paper or digital.  Real paper cards printed more than 3 years ago are supposedly no longer being printed, yet they are still used for tournaments with cash prizes.  Cards are lost, destroyed, and taken off the market by collectors every day.  Those old cards become hard to find and go up in value because new players want to play tournaments that use old cards.  That is one major reason that every magic card has some sort of value.  If you think it might be used someday for a tournament, it will hold some value.

Cards currently being printed and created on MTGO have value for a variety of other reasons, but a lot of that value is based on somebody wanting that card for their deck that they think will win a tournament now or later.    There is no infinite pool of magic cards being printed.  They only print as many as we buy.  And then they stop after a couple of years, and that's all they will ever print of that expansion.  So we think... Smile
MTGO would survive if there was no cash out; there's a part of the player base that always pays. We mainly hear from a vocal few that feel entitled to a big payout, the ones that 'go infinite', the full time traders who can use buying power to control the market etc., but don't forget that there's a huge base of players that support the pyramid. There's always hundreds that enter events with little expectation of a profit, and there are thousands who would rather pay 25 cents for a staple common than waste leisure time getting the same thing from a 100 for 1 bot. So no, mtgo is not completely contingent on perceptions of value. However, there's a user quality factor. Talented people are going to want to maximise their returns, and without a cash out the best players might leave. If it was possible to prevent traders from profiting then the free card market we enjoy today would collapse.
"Value" is an interesting concept.  At its core, something has value because you want it for some reason, and (in classical microeconomic theory) you only make trades to gain value.


So if we start with the question "In order for MTGO to exist, do cards need to have value?", the answer is yes, clearly they do.  Pretty much everybody values money to some degree, as it can be easily traded for other things that they want.  In order for people to trade their money for another hit of MTGO, they need to view what they are getting as having some value.


However, where digital cards get their value from is much more complicated.  Here are a few examples:

1)  Cash value.  You value a card because it can be sold for actual money (via paypal or a dealer, for example).
2)  Use value.  You value a card because you're going to use it for something.
3)  Speculative value.  You value a card because it may be worth more in the future.
4)  "Book" value.  You value a card because it cost you money to get.

And there are many many more.  While I can't make terribly solid predictions as to what would happen if they took away one source of card value, I'm fairly certain that any loss of any kind of value is bad for the game.
Your "item sink" theory isn't entirely true.  You can't compare this to WoW gold or currency in another game.



Actually the comparison holds pretty well. You see, the amount of copies of card may be physically limited and not truly 'infinite', but they ARE generated on demand while they are 'in print' and I can guarantee you that more cards are generated than are needed by the players. This means they might as well be infinite: there are much more copies than strictly needed.

How can this be? Well, read on...

Ppl always say here that when ppl stop needing cards they will stop buying them and if that happens the pile of cards doesn't get bigger. Like you say "they only print as many as we buy". Well they don't actually. They print more: a lot of cards enter the system through drafts, and ppl will not stop drafting when they have 'enough cards', because they don't draft for that reason. Ppl will draft while the drafts run and this pours a huge amount of cards into the pool.

No constructed player ever needs more than four copies of a card that isn't a basic land or relentless rats. In paper, you often keep more than four copies because you don't want to physically move them between decks all the time. This means online demand is far lower per player than in paper.

Yes, you are right that the fact that there IS demand for a card at all is because cards have an intrinsic 'play' value - you want cards primarily for your deck and that means they have an inherent value. The monetary value of a card follows from that, but that value is certainly not absolute; it is at best relative to the other cards which are equally desirable, more desirable or less desirable.

But this is no different from an MMO - ppl want that sword because it does the most damage, but if there are too many copies floating around, their monetary value will tank. Once there is a surplus of an item, no matter how big that surplus is: there are too many, its value will drop. The only way to fix that is by reducing that surplus somehow.

This is why WoW uses 'bind on pickup' and 'bind on equip' - it is a very effective item sink. Once an item is bound it is effectively removed from the pool of available items, it might as well be destroyed already.

I guess what I'm trying to say is that the absolute monetary value for a highly desirable item can be (very) low provided that such an item is (very) oversupplied.

MTGO does not have 'bind' or any other type of sink - the ONLY way cards ever get removed from the system again is by redemption. Since redemption removes only a complete set, this leaves copies of rares and uncommons and commons that will never EVER leave the system. Due to the popularity of drafting this oversupply is so big that prices are continuously dropping over time.

Make no mistake, even with redemption running smoothly, prices have tanked A LOT over the years. It used to be you could easily sell commons 64 a ticket, any set, now it's hundreds a ticket, even for relatively new sets. The same is happening with rares, although the effect is slower: I've already seen 20 rares per ticket bots pop up and they actually have a good supply. It's not a fad or a misguided seller: these bots stick around. And such rares used to be 2/ticket in days gone by.

Have you noticed what happens when redemption stops for whatever reason? Prices immediately start to drop across the board. Even when it is clearly a temporary interruption. It's not just ppl saying "oh now my cards are worthless because I can no longer redeem them" which might be the case when redemption of a set permanently ends. No, absense of redemption creates a situation in which the supply of cards is affected in such a way that it affects their prices.
Free Speech
Free speech is the right to speak your mind without government censorship and without fear of extralegal retaliation like harassment or violence. That’s all! Free speech doesn’t include the right to speak your mind on any forum anywhere. The government may not prevent you from speaking, but private parties, like blog owners or corporations, aren’t required to let you use their property as your platform. Free speech doesn’t include the right to be believed or to be taken seriously. People may mock, ridicule or laugh at what you say, or they may reject it outright. Free speech doesn’t include the right to be listened to. People who don’t desire to hear your opinion can hang up on you, block you on social media, change the channel, close the browser tab. Free speech doesn’t give you the right to bombard people with harassing messages or otherwise force them to pay attention to you against their will. And free speech doesn’t include the right to suffer no consequences whatsoever for your expressed opinions.
There's of course copyright-violating programs that allow people to play magic over the internet without getting on MODO.  I find that aside from the fact that MODO handles rules interactions and everything else, some of the major arguments for playing MODO over these other programs is that if you play for stakes, you're almost assured higher caliber competition (which is a good thing), and you have the possibility of making profit.  So take those two things away, and the case to pay for MODO over a free program gets a lot weaker.  Not only that, but I want to play against competitive, skilled players who are playing for stakes, rather than casual people who are playing for free; what I don't want is to play with people who pay for a valueless product, who I therefore consider less intelligent, and therefore they should be even worse competition than the people who play for free.  So yeah, MODO would lose a lot of players, obviously including me, but probably not everybody.
There's of course copyright-violating programs that allow people to play magic over the internet without getting on MODO.  I find that aside from the fact that MODO handles rules interactions and everything else, some of the major arguments for playing MODO over these other programs is that if you play for stakes, you're almost assured higher caliber competition (which is a good thing), and you have the possibility of making profit.  So take those two things away, and the case to pay for MODO over a free program gets a lot weaker.  Not only that, but I want to play against competitive, skilled players who are playing for stakes, rather than casual people who are playing for free; what I don't want is to play with people who pay for a valueless product, who I therefore consider less intelligent, and therefore they should be even worse competition than the people who play for free.  So yeah, MODO would lose a lot of players, obviously including me, but probably not everybody.




There are some of us casual players who might surprise you with our "skills" lol. Anyway this discussion seems to be a recurring theme. The main reason MTGO is so compelling to me to play is that it does almost all the leg work (including imho decent graphical representation even if the UI is at places very spotty.) Those free programs need constant updating (as does the client but that's taken care of for me by a team where as at least one of those programs is annoying in its updating process.), have the same UI limitations, one has no rules enforcement at all and is fairly antique by today's standards. In addition I have no fear of being unable to play when, where and how I like as long as my own end is operating normally on MTGO.

I do think that limited events are so much easier online than anywhere else, I don't even yearn for brick n morter drafts anymore. If I want a draft they come in a variety that is unfound in the paper mtg world.

On the other hand I disagree entirely with your analysis of other players' intelligence based sole;y on their (in a very narrow sense) observed decision making ability. Wisdom, OK Im with you. It seems wiser to go for the higher value stakes (barring other considerations.) But it doesn't seem to indicate any lack of intelligence other than perhaps a more difficult time (given many different factors) learning what is the best method for them to have fun. And that is an extremely subjective thing to guage, so I don't think you can really generalize about that safely.


Winter.Wolf

Intelligence: having a high IQ.
Wisdom: keeping your IQ to yourself.
Free Speech
Free speech is the right to speak your mind without government censorship and without fear of extralegal retaliation like harassment or violence. That’s all! Free speech doesn’t include the right to speak your mind on any forum anywhere. The government may not prevent you from speaking, but private parties, like blog owners or corporations, aren’t required to let you use their property as your platform. Free speech doesn’t include the right to be believed or to be taken seriously. People may mock, ridicule or laugh at what you say, or they may reject it outright. Free speech doesn’t include the right to be listened to. People who don’t desire to hear your opinion can hang up on you, block you on social media, change the channel, close the browser tab. Free speech doesn’t give you the right to bombard people with harassing messages or otherwise force them to pay attention to you against their will. And free speech doesn’t include the right to suffer no consequences whatsoever for your expressed opinions.
Well, I never said I was wise ...

I'm one of those who pay to play. My MtGO spending is fun money, not an investment.

However, you can always cash in your digital cards for real dollars on the secondary market. It's probably even easier than doing the same with paper cards. It's just that you won't get as much as you probably expect. This irrational feeling that DOs are not worth as much as their paper counterparts is just that, an irrational feeling. It reminds me of the way quite serious people insist that online versions of scientific journals are not enough, and you need a paper copy just in case of ... what, exactly?

And what if Hasbro goes broke? Well, not much to worry about there.

Go draft, young man, go draft!