Can Investing in Trading Card Games be Profitable?

In 2017, a few friends and I were in Japan and were just browsing in a card specialty shop. The shop sold cards from many different games - Yu-Gi-Oh, Duel Masters, Pokemon, and Magic: the Gathering (MtG) amongst other more niche titles. One particular card caught our eye - the infamous Black Lotus from MtG.

At the time, the price tag shocked us - who in their right mind would pay 1.4 million yen (~12k USD) for one single card? It was ridiculous, and our broke schoolboy pockets couldn't afford it even if we wanted to buy it. So we walked out of the shop with just a photo.

It turns out that we should have called up our parents to take a loan to buy it because the price of an Alpha Black Lotus rose significantly since then - from around USD$12k to about USD$90k now. If the card was properly graded to be a gem mint, the price potential would be even more - one copy sold for USD$500k last year! (Source: PCGamer)

For the average person, this doesn't make sense. A trading card doesn't give you any dividends, and no one in their right mind would actually play a card worth $10k in their day-to-day deck only to damage it. The sole purpose of these cards is for collecting. And investing.

Most notably, a Youtuber named Rudy (Channel: Alpha Investments) has been investing in MtG cards for the longest time, documenting his card unpacking and card investment strategy on his Youtube channel.

He doesn't buy cards with the intention to play them, but rather to invest in them to speculate on price increases. And although he has garnered many haters over the years for alleged market manipulation and popularizing MtG investing, causing card prices to inflate and making MtG less accessible for newer players/collectors, it turns out that he was right.

Rudy was already investing in MtG way before the TCG boom in 2020. He had tons of rare cards printed decades ago and probably is sitting on over a million dollars worth of cards at this point.

That being said, the TCG market is still a rather illiquid market where you have to spend time and effort to list your cards, ship them to buyers, handle refunds, and other small issues should you decide to venture into TCG investing. It's nowhere near passive investing, and it's often hard to sell cards of low value without taking an L. Unlike equities or crypto, you can't sell whenever.

Is investing in TCGs still worth it? I'd like to echo a popular opinion on investing in alternative investments like TCGs, sneakers, and figurines. It's only worth it if you like whatever you're investing in and are okay even if the price doesn't appreciate. In my opinion, there is a greater opportunity in these alternative investments if you have an eye for what's good and what's not since considerably fewer people invest in such things. However, you'll only gain an eye for these if you really like the things you're investing in.

Nothing is guaranteed, and the possibility of losing your investment is greater in alternative investments than in equity markets. However, many people still do it because it gives them a sense of satisfaction from collecting things that they love. Only invest in alternative investments like TCGs if you really love the underlying asset.

Post Header Images: Black Lotus Image and Price Chart - MtgPrice

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