The Future of Modern (Masters)

Tweet by SaffronOlive // May 20, 2015

finance

Modern Masters 2015 has not even been released yet and the set has been a roller coaster ride. It was announced with the spoiling of Tarmogoyf, Emrakul, the Aeons Torn and Etched Champion, which caused no small amount of excitement. Months later, we had the unofficial spoiling of 13 mythics (which later proved to be only somewhat correct) which made it appear as if the set was overflowing with value and drove the hype through the roof. Then came the official spoilers which started strong, but by the end of the week had people scratching their heads at the lack of value in the lower rarities and the price of a box began to drop. Once the expected value was discussed and found to be average, which felt especially bad in comparison to the original Modern Masters, some people even canceled their pre-orders.

As of today, you can buy boxes for $11 less than the $240 MSRP and the future of the set is in hot debate. Some people believe that you'll still find boxes on the shelves come winter while others are expecting boxes to be scarce and cost $350 by December. As a result, our topic for today is the future of Modern Masters 2015; but to really discuss this future we need to talk about the Modern format as a whole. But first, let's discuss sealed MM2 booster boxes.

Booster Boxes

A while ago I researched why some boxes are worth far more than the expected value of the cards inside the box and came to the conclusion that when box prices far outpace EV, it is generally for one of two reasons: First, the draft format is awesome — good enough that people don't mind losing money because the format is so much fun. Rise of the Eldrazi is a good example of this in the paper world, as are various cube drafts on Magic Online. Second is the presence of one extremely high value card (like Jace, the Mind Sculptor) which allows people to play the lottery while also having fun cracking boxes.

By this criteria Modern Masters 2015 holds up fairly well. While I'm skeptical that MM2 can join the original as one of the all-time great limited formats, the early testing (for people who built the set from existing collections) is encouraging and suggests that the format is pretty fun. It is built on the foundation of the original with a bunch of strong two-color archetypes and the potential for a five-color deck. The problem I see with MM2 limit is that the draft archetypes feels like something you'd find in a normal expert level expansion (or even core set *cough* Bloodthirst *cough*) rather than in a cube draft, and the cube-like feel was part of the appeal of MMA.

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The reason I loved Modern Masters limited, and the reason I drafted the non-redeemable set on Magic Online over 100 times, was that you could do some cool degenerate and (from my perspective) very fun things in almost any color pairing. For example, you could draft a UR Strom or UR Dampen Thought Arcane deck which had potential to be the best deck in the pod or completely unplayable (especially before people realized they should hate-draft key pieces). In MM2, UR gives us what Neil Oliver calls in his MM2 draft guide "the most disjointed of the 10 color pairs ... It has Elementals as its theme but really only pays you off with an Elemental lord, and to a lesser extent Smokebraider."

Plus, most of the archetypes in MM2 simply don't feel like Modern to me. In MMA, UR Storm feels like a limited version of a Modern deck; so does BR Goblins, and UB Fairies. In MM2 UR "disjointed Elementals" seems awkward, while BR Bloodthist is basically an M13 limited deck, and UB Proliferate was the deck you were playing in SOM draft when didn't have the seat to draft Infect (the best deck in the format). None of these archetypes even pretend to be Modern playable.

This is not to say the format will be bad; I expect it to be quite playable and fun. I truly believe that Wizards has figured out the formula to make average-to-great limited sets almost every release. I just don't think it will be able to hold a candle to the original MMA. Modern Masters was a once in a generation set, the type of set where it almost makes sense to buy a box to leave in your closet so that you can draft it with your children 15 years from now just so they can have the experience. MM2, from a limited perspective, feels like just another set; an above-average set, but just another set nonetheless. I'm not sure that just being above-average is good enough these days, especially when the expectation is that you will be great.

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The reason the limited format matters to box prices is that MM2 isn't the type of set you crack for value — the value just isn't there consistently enough. So the answer to whether or not boxes will be sold out in six months rests almost solely on limited (also the buying habits of speculators to a lesser extent, but that's another topic). Are people going to consistently show up at their LGS and pay $35 or $45 to draft this set? If they do, it's not going to be because it's a wise financial decision — remember, you don't have Path to Exile, Lightning Helix or a bunch of other expensive uncommons and commons to save you when you open an Ant Queen this time around — it's going to be because the experience is so good and the draft is so fun that you don't mind losing your entry fee.

We know this model works with average draft formats that cost $15, which you can look at like buying a movie ticket; sure you lose $10, but you get a few hours of entertainment. It also works with great draft formats that cost $45 (especially when you have to get unlucky not to open $25 in value), but can it work with a merely above-average draft format that costs $45 and one where you can't expect a significant ROI? This is the question I can't answer for sure. If you believe yes, then I would expect MM2 to be sold out and box prices to increase. If you believe no, then I would expect boxes to be readily available at around MSRP for months.

Modern Singles

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One of the things I talked about during last week's podcast, and have been thinking about since the Birthing Pod banning this past winter, is that the finance community needs to change their expectations on the Modern format. Wizards is selling Modern as the replacement for Legacy — a format whose hourglass is far from infinite. Everyone knows that Legacy is dying a slow death; the sand is slowly slipping out of the hourglass, the time counters are being removed, and there simply wasn't that much sand to begin with.

According to a bunch of old MTG documents on a USC server (whatever that's worth), there are only 1,100 of each Alpha rare, 3,200 of each Beta rare, 18,500 of each Unlimited rare, and 289,000 of each Revised rare in existence. This means that, between all three sets, there are only 5,700 playsets of Black Lotus that have existed, are in existence, or will exist for the rest of eternity (barring the end of the reserved list). And remember, these are little pieces of cardboard that were printed over twenty years ago, not exactly the most durable of investments, not that they were even considered to be an investment back then in the days of $20 Moxen. I meet people on a regular basis that claim to have owned a Black Lotus (or several) only to have their mother throw it away when they left for college or their little brother feed it to the family dog. While these stories may or may not be true, there is little doubt that some significant number of Black Lotus, Mox Pearl, and Forcefield have been lost over the years.

Even if you include Revised (the last tournament legal printing of the dual lands) which was printed in much greater numbers than the previous sets, there are still less than 80,000 playsets of each dual ever printed. How many of those are still around? I have no idea, but again it has to be significantly less than 80,000. Even assuming that all are still in existence, this would mean that at a hypothetical 4,000 player GP where everyone had a playset of Underground Sea, 20 percent of all the Underground Seas ever printed would be in attendance.

Sorry, I got off on a bit of a Legacy tangent. The point I'm trying to make is that, barring the unlikely end of the reserved list, Legacy is dying a slow death. Every time someone spills a cup of coffee on a Tundra, that's one less Tundra that can be played. Once this happens four times, that's one more player that can't play Legacy. And these things do happen. There was a Reddit post a couple weeks ago where a person talked about leaving their cube on the top of their car while they drove home from a tournament, which predictably ended with thousands of dollars of dual lands being strewn across the highway.

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In Modern, on the other hand, everything can (and will) be reprinted. Modern is not the reserve-list-protected safe haven for value of Legacy; it's actually much more like Standard. Sure, you can invest $1500 in a deck like Abzan, but you need to do so with the knowledge that over the next year Liliana of the Veil will get a promo printing, as will Path to Exile, Marsh Flats and Verdant Catacombs will end up in in BFZ, while Tarmogoyf, Fulminator Mage, and Dark Confidant will show up in the next Modern Masters. That's almost all of the best, most expensive, and most important cards in the most played deck in Modern being reprinted, in six months time.

Reprintings and bannings are to Modern what rotation is to Standard: a firm end date for the value of your cards. For instance, assuming the enemy fetches are indeed reprinted this fall, take a look at how much value your Modern mana base (normally the first and more important investment into a format) will have lost since the release of Return to Ravnica a little over two years ago.

Let's say you own a full playset of shocks and a full playset of fetches. At their peak, these 80 cards had a total value of $3,972.80 for an average of nearly $50 per card. If you simply held onto these cards (assuming Zendikar fetches depreciate similarly to Onslaught fetches), these same cards will only be worth $1,653.60 this fall — a loss of $2,200. This amounts to a 58.34 percent decrease in a relatively short amount of time.

A 60 percent decline in a short period of time just doesn't happen in Legacy. The recent "big decline" for Revised duals was in the neighborhood of 15 percent from peak, not even in the ball park of fetches or shocks. So let me ask you, where do we see the value of staple cards plummet 60 percent (or more) with regularity? The answer is Standard heading into rotation. One thing Modern Masters 2015 shows us clearly that that Wizards is not afraid to reprint high-end cards again and again and again, to the point where our bi-annual Tarmogoyf reprinting for Modern is almost as predictable as an 18 month rotation in Standard. Moving forward, we need to think of Modern finance like Standard finance: play the PTQ season and seasonal factors, and keep an eye on new releases so you can catch things like a Treasure Cruise-influenced UR Delver spike. Basically, get in quick, get out quick, and move on to the next thing, just like you would in Standard.

Just to be clear, I'm not trying to discourage people from playing Modern. I play Modern. I enjoy Modern. I want you to play Modern too. I'm not even trying to discourage you from buying an expensive Modern deck, or expensive Modern cards. All I'm trying to do is encourage you to to think of Modern like Standard — a format where finance is all about timing. Just like you wouldn't hold your Standard deck through rotation, don't hold your Modern decks through obviously telegraphed reprinting like Modern Masters, or at least if you do, do it will the full knowledge that you are going to lose a significant amount of value.

Back to Modern Masters 2015

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The question that spurred this entire article was "what do you think about the prices of MM2 singles in the future?" Let me try to answer this in a way that helps justify my long ramble about Legacy and Standard: In my opinion, over the long haul, the price trajectory of every valuable Modern card is down. To illustrate my point, I made my own price chart for Elesh Norn, Grand Cenobite, but instead of showing past prices, this is how I expect her price to change over the next 10 years. However, this chart is about more than just Elesh Norn, Grand Cenobite; this is how I expect the next 10 years to go for most of the important cards in the Modern format.

While these numbers are far from exact, the pattern is the important thing. This is the life of a Magic card these days:

The card is printed in a Standard-legal set. It seems some Standard play, maintains a reasonable price during its time in Standard, and then starts to drop heading towards rotation before hitting its floor in the month or two before it leaves the format.

Immediately after rotation, supply is massive as many Standard-only players dump their copies. Over the course of the next two or three years, assuming the card is Modern playable, the price starts to increase as people begin buying the card again. Eventually the card may end up being more expensive than it ever was in Standard.

In year three or four, the card becomes eligible for reprinting in Modern Masters (this is "year one" on the Elesh Norn, Grand Cenobite chart). Of course, this is all assuming it manages to dodge the numerous supplemental products in between. It ends up being reprinted at mythic in the limited release set which significantly drops, but does not completely destroy, the card's value.

Over the next two years, the price starts to increase again, slowly but steadily. After all, Modern Masters doesn't release that many cards into the wild. Maybe it doesn't make it all the way back to its one-printing peak, but it will probably get back to at least 70 percent of its previous high.

Suddenly it's time for another round of Modern Masters. Wizards realizes that the card is still a bit too expensive and that people still like playing with it and opening it, so it shows up again. The price plummets to an all-time low.

Over the next several years, the card begins to gain again, but this time much slower than with the initial reprinting. A dollar here, a dollar there. At this rate, it would take 20 years to get back to its previous price. On the plus side, it does manage to dodge the next edition of Modern Masters.

Unfortunately the joy is short lived. The price is low enough now that Wizards feels safe putting it in a Commander Deck. The price hits a new all time low and the recovery is even slower, if it even ever happens.

Remember, this is for cards that are tournament staples. Most casual cards will get it even worse, dropping far more from the initial reprinting and taking longer to recover. The only good news for casual cards is that it may take long for the second and third reprinting to come around, potentially giving it more time to recover.

This process is how Wizards leverages their intellectual property and reprint equity. Print a cool, splashy and powerful card in Standard to sell an expert-level expansion. A few years later, print the still cool, splashy and powerful card in a limited release like Modern Masters or From the Vault to sell that set. If the card is very popular and powerful, you might be able to do this two or three times, but there are certainly diminishing returns — the third reprint is far less exciting (and helpful to selling a set) than the first. Finally, the equity in the card is mostly used up, so they stick it in a theme deck, eek the last bit of value out of the card, and then it's over. Sure you can bring it back to Standard 10 years later, and people will say "I remember when this used to be great, but with power creep, and the new found focus on spells over creatures (lol, I wish), it's just not what it used to be."

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As such, the key to investing in Modern Masters 2015 cards is to play these cycles. Buy after the first reprinting, cross your fingers, and hope like hell Wizards doesn't mess with the clock and stick it in a supplemental product ahead of schedule. There is money to be made playing this pattern, but there is still risk involved. I mean, we've been expecting a Damnation reprint for years now, and it simply doesn't happen, while Vendilion Clique, Tarmogoyf, and Dark Confidant are on their third printing and Path to Exile is on its seventh. You never can tell for sure, so we are all left with making educated guesses.

This said, most of the rares and mythics from MM2 will not be reprinted again for a couple years at least (although, assuming the game survives, they will be reprinted again eventually), which means if prices drop significantly this summer and you choose wisely (focus on four-of, Modern playables), there is likely money to be made over the mid-term. If you are looking for cards to fill out your decks, this summer is a great time to do it but I would wait at least another couple weeks to give the GP-fueled supply a chance to reach the market. After that, there are several major GPs on the horizon along with Modern PTQ's which could drive demand. In fact, this may already be happening, as people worried about the poor box EV cancel their booster box orders and purchase the singles they need instead, so it might not be wise to wait too long although it really depends on whether or not boxes are still readily available at or near MSRP, which brings us back around to the the draft format where all of this began.

Conclusion

Anyway, that's all for today. Leave your thoughts, ideas, criticisms, and opinions in the comments, and as always you can reach me on Twitter (or MTGO) @SaffronOlive.