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?
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.
You could say the same about any fiat currency too, and people are still willing to be paid in dollars.
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
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.
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.
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.
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...
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.
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.
Intelligence: having a high IQ.
Wisdom: keeping your IQ to yourself.
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.
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