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The Men Who Are Worried the Next Recession Will Tank the Pokémon Trading-Card Economy

Sorry guys, your hologram Charizard may be worth exactly shit

Atop a high shelf at Steven Graham’s home just outside of London, having gathered a thin layer of dust, is one of his most prized possessions — a thick blue-and-yellow binder filled with Pokémon cards. He’s had it since he was a tween. When he was 11, in fact, he remembers carrying it around all day in his backpack. “I was made fun of at school for it,” he explains. “But I knew it was worth keeping.”

The British thirtysomething tells me he was given his first Pokémon pack by his father and never really stopped collecting them. Today, his collection numbers more than 2,000 cards and many rare first editions, which are worth hundreds, if not thousands, of dollars. Speaking of money, what started as a hobby, Graham now sees as an investment — one he’s hoping will mature enough to earn him a serious hunk of cash. “I’m not expecting to make millions from my collection,” Graham tells me. “But I did expect to make a few thousand [British pounds] from them in the next few years, especially if the value of the cards keep going up.”

Notice, though, his shift in tense — from present to past. That’s because Graham and other card collectors like him are becoming increasingly nervous about what a recession — an economic downturn that economists, business leaders and think tanks believe is imminent and might actually be more severe than the 2008 crash — will do to the value of their cards. 

On YouTube, a place where trading card game players and collectors often speculate on the values of cards, there are dozens of videos addressing what might happen during such an economic downturn. Along those lines, some YouTubers, like JohnnyCanal, suggest that collectors attempt to sell their highest value cards over the next few months, arguing that because trading cards aren’t an “essential” good, selling them during a recession will inevitably result in a lower price. 

On the flip side, other YouTube channels that specialize in the value of collectibles, such as Chief Collectibles, believe that talk of a recession severely impacting trading card collectors is “extremely exaggerated.” “My advice is, don’t worry about the value of the cards going down,” says YuGiOh Tube, a former stockbroker who now trades in trading cards. In a podcast from earlier this year, he explains, “The cards aren’t going to plummet like stocks. Cards aren’t like cash, Bitcoin or a kind of currency that will fluctuate. Cards are more similar to art. The rare cards have status. And they’re more stable because a set number of rare cards were published. So the demand for rare cards won’t change that much, and their value won’t change that much either.”

The debate and speculation continues over at r/mtgfinance, a subreddit of more than 50,000 people that tracks and predicts the value of Magic: The Gathering cards. “Magic cards are different from other kinds of collectible cards,” says Jonathan Medina, a member of MTGfinance and an amateur Magic: The Gathering player, adding that while games like Pokémon and Yu-Gi-Oh! derive much of their value through nostalgia (from anime and manga series to toys), Magic is different. That, however, doesn’t make it recession-proof — far from it, in fact. “Magic: The Gathering doesn’t really have the nostalgia element,” he says. “What it does have is dedicated, long-term players and collectors, which is why people [in the MTG community] are probably more cautious about an economic collapse. These are people who make a portion of their overall income from MTG.”

There are a couple of other key variables in MTG card pricing as well. First, Medina explains, “There are way more active players of MTG than any other trading-card game, meaning it’s harder to track how many cards are in circulation at a given moment, or what cards are in circulation. That’s made worse when you have people who give out inaccurate data [in the subreddit] or in any of the card value sites, in order to manipulate the price of cards.” Second, he continues, “Magic is primarily a competitive game. So people who collect cards do so with the intention of selling them to competitive players, rather than holding onto them for nostalgic purposes.” 

This, Medina says, inevitably results in a more volatile market: “There’s just more room for chaos. You can have a buyer who takes advantage of a downturn, during which there are less buyers for particularly rare or useful cards, by buying them all up and hoarding them, or reselling them at a way higher price than their market value.” Obviously, too, there’s a trickle-down effect on professional MTG gameplay. “There are players who look to the secondary and reselling market to improve their decks, or change strategy,” Medina says. “And if they don’t have the funds to pay for the cards they need, or if there’s a bidding war on cards that have grown in value, it’s more likely that those players won’t compete.” 

“It depends on how bad the recession would be,” Medina continues, “but you probably would see richer players have more advantage at tournaments, be more likely to win them and be able to use that prize money to buy more cards that players without as much money don’t have access to.”

More largely, George Charlson, a theoretical economist and graduate student at New College, Oxford, says that trading-card game economies are difficult to predict because they’re niche investments that are intended for a small market that’s slavishly devoted to their game of choice. “It’s unlikely that a recession would make Yu-Gi-Oh! cards so expensive that a player would switch to Magic cards,” Charlson explains. “What’s more likely, is that you will have some people who won’t be willing to buy as many cards or purchase expensive cards than they would have if there wasn’t a recession. And you might have other people who — if they want to get rid of their cards urgently — would sell at a lower price than they’d initially expected.”

In other words, despite what some collectors suggest, their cards are not recession-proof. “The argument some people make is that because there’s a limited number of cards in circulation at a given time, the value would be more stable,” Charlson tells me. “But just because the supply is flat, doesn’t mean the demand won’t change. It doesn’t mean that buyers who might have been willing to buy won’t decide to wait, or see if the card they need will lower in price.” 

Where then does that leave Graham, who, in such a scenario, stands to make (maybe a lot) less money than he’d previously anticipated?

For now, he’s put some of his “medium-rare” cards on eBay, to see how much of a return they might yield. So far, he’s sold a third-edition Shiny Pidgeot for just shy of $40 and a vintage cracked Ice Pikachu for $120. Meanwhile, he’s seen cards still in bidding for more than $75,000, a sign, he believes, that there’s a chance he could still make a considerable stack of cash from selling the rare cards in his collection. “Probably not enough for me to extend the house,” he says. “Although, I don’t know — I have some pretty good early editions.”