Wednesday, 19 March 2014

Yugi-Nomics: The Capitalism of YuGiOh

The secondary market in YuGiOh is built like any other capitalistic society.  It is a market built on supply and demand.  The market value of cards will fluctuate based on what is popular in top decks in the current format, reprints of a high value card, new ban list announcements, or hype.  These fundamental alterations signify changes in the demand of the product.  The increase in demand or decrease in demand that these changes can bring will ultimately have a correlating effect on the supply of the product.  If demand goes down, supply goes up, and vice-versa.  For instance, if a deck that is considered to be decent does significantly well at an event, the prices of cards in that deck will go up, because it is likely that they are more desirable after the event.  The reverse can occur as well, if a deck is expected to do very well at an event or if a card is expected to perform very well, but then underperforms, it is likely that the value of the card will drop after the event. 

In general, if a popular card is reprinted it normally has a negative effect on the current value of that card.  This is primarily for a few reasons.  The first is that players who own the card panic and believe that the price of the card will begin to drop to the basement, so they offload whatever stock they currently have of that card.  The second is that players who do not care about rarity or are not using the card will tend to try to offload theirs as well as to get the greatest return that they can out of them.  The third is that most importantly the demand will drop.  This is simply because players who do not have the card will not want it, as they know that it is getting reprinted; therefore, only players who have to play the card will generally be looking to pick them up.

When a new ban list is announced it can have an extreme effect on the secondary market.  If a popular card is released from the shackles of the forbidden list, high rarity versions of that card will normally appreciate the most from its new found legality.  Conversely, if a card’s usage is limited then its price usually shrinks, and generally, the higher the rarity the bigger the drop.  It can have an extreme effect on cards that are not even named anywhere on the list as well.  This effect is caused by speculation that these cards will be highly sought after once the list has taken effect. 

Hype is a huge reason for many of the fluctuations that happen all the time in YuGiOh.  If a new card is announced that the player base perceives to be “broken” or overpowered, then cards of a similar archetype will quickly skyrocket in value.  The same can be said about cards that are perceived to be counters to the deck that just got support.  A good example of this is Droll & Lock Bird.  Upon the announcement of Spellbook of Judgment, it was quickly hailed as one of the most broken cards to ever be released.  Once announced, players began looking for ways to counter and stop Spellbook of Judgment.  Enter Droll & Lock Bird.  Droll & Lock Bird is a rare from the low-printed Starstrike Blast.  Due to Droll & Lock Bird being completely irrelevant prior to the announcement of Spellbook of Judgment they were available for as low as $0.10-$0.25 each.  Those who invested, cashed in huge when the card rose to just under $10 each during nationals season 2013.

Besides supply and demand, there are other factors that can affect how effectively you can sell cards.  The most important two, however, are your market and your price point.  The market simply refers to who you have available to you that you are able to sell to.  Secondly, your price point is incredibly important, because if someone can get it cheaper somewhere else, chances are, they will.  In order to make money efficiently and effectively, one has to price and market themselves accordingly.  If people do not know that you are constantly buying and selling, how can you expect them to know to come to you when they need something?  Pricing yourself efficiently can be a difficult task.  You want to price your cards at a price where they will move quickly, but you do not want to undersell yourself either.  Why sell for $5, if every single person is willing to give you $10?  What many YuGiOh players fail to understand is that if you are always looking for the maximum amount of profit, you are actually leaving money on the table.  For instance, if market value on a card is between $75-85 and you hope to get $80, but you only paid $50-60, if you are trying to sell it as efficiently as possible, the first person to offer you between $70-75 should be who you are selling it to.  If you manage to get $80, great.  The trouble is that the amount of time you are holding on to the card trying to get $80, the card value can change and you may end up with less.  You are also unable to put that $70 back into cards that will in turn make you more profit.


The cheaper you buy, the cheaper you are able to sell.  Do not be greedy.  It is actually quite simple and they are words to live by.  The entire business is about turnover.  If you are not turning cards over, you should ultimately consider a different operating model.  In short, the quick profit is always the best profit.  There is no shame in making a few bucks here and there on small cards.  Those few dollars here and there all add up and they are all profit as far as you are concerned.

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