The Expected Value of Oath of the Gatewatch

As Magic players, one of the first things we learn is a motto that is subsequently beaten into our heads over and over again: Don't open sealed product! As a rule of thumb these words are good advice. More often than not you can expect to lose money by cracking packs. However, there are certain times when buying and opening booster boxes is not only acceptable, but also profitable. One of these situations is when a new set releases.

Now these cases do not hold true for every set or even most sets. Over the past few years, discounting supplemental products like Commander decks, there have been two sets where you could expect to open more value from the box than you paid for the box: Return to Ravnica and Khans of Tarkir. There have also been sets where you could expect to break even: Gatecrash, Fate Reforged, Theros. And, of course, there are a bunch of sets where cracking a box is almost guaranteed to lose you money: Dragon's Maze, Born of the Gods, Dragons of Tarkir. Because of this uncertainty, I like to calculate the expected value (EV) of a booster box every time a new set comes out to figure out whether or not buying a box is worthwhile in strict economic terms.

One more thing before getting into the methodology: EV calculations only take into account cold, hard numbers. There are many reasons why people buy a box. Some people buy boxes because cracking packs is fun. Others buy boxes to play limited with their friends. For some people, buying a box is a tradition or they enjoy the lottery aspect of opening an expensive foil mythic. These notions are all fine reasons to purchase a booster box, even a low-EV booster box. When it comes down to it, Magic is a game — there is value in having fun and an EV calculation can't account for non-monetary value. So please don't let this EV calculation be the only factor in your decision of whether or not to buy a box.

What is Expected Value?

While many of you are probably familiar with the concept of expected value, here's a brief refresher. Expected value tells us how much value we can expect to open in a booster box. To calculate EV, we first determine the odds of opening a specific card, the "multiplier" you'll see throughout the article. Next we calculate the value of each card. Then we multiply the odds of opening a card by the card's value, which tells us how much value we expect that card to add to the box. Finally, after we do this calculation for all the cards in the set, we can simply add up the total and determine how much a box is actually worth.

Buylist/Ebay Pricing

Most non-Saffron EV calculations use TCGplayer-mid or the prices vendors like StarCityGames or ChannelFireball ask for a card. Unfortunately these numbers do not mean much for a couple reasons: First, I (and most of you) can't get StarCityGames or TCGplayer-mid prices when we sell our cards (wouldn't that be nice?). Instead we get things like eBay minus fees and shipping or buylist prices. As such, in calculating the value of cards in the set, I'm trying to use a number that I realistically think I can get for the card tomorrow. This part is important because new sets tend to decrease in value quickly. I use completed eBay listings minus 15% for fees and shipping, or the best buylist prices (when available). The prices listed on the charts of this article are lower than the MTGGoldfish price; I am making deductions that take into account the "hidden" costs of selling the cards. When it comes to making a profit opening boxes, timing is everything. Prices drop quickly once a new set starts being opened. A set can go from positive EV to negative EV in less than a week, sometimes overnight. By opening boxes on release day (or release weekend), we can take advantage of the excitement for new cards (new demand) and the fact the freshly-opened cards haven't had time to reach the market yet (lack of supply).

Methodology Notes

1. Commons (except in very rare cases) are considered bulk, which I value at $5.00 per thousand. This valuation means that an entire booster box worth of Commons adds about $2.00 to the expected value of the box.
2. Most Uncommons are also worthless for the purpose of calculating EV. They cannot be reliably sold as singles. Apart from a handful of "chase" and "semi-chase" Uncommons, everything else at this rarity goes into the bulk pile along with the Commons.
3. In the past I didn't include foils in the EV for a couple of reasons. First, they are fairly rare, so there is a ton of variance in what you open. On average, a booster box contains three foil Commons, two foil Uncommons, and one foil Rare. Second, foil Mythics (typically the most valuable foils) are extremely rare. The odds of opening a foil Nissa, Voice of Zendikar is so slim (one in every 2,592 packs) that it's barely worth considering when crunching the numbers. I consider the possibility of opening a valuable foil like a bonus lottery ticket you get for free with the purchase of a box. When it happens, it's great, but don't count on it. However, since Magic Origins, I have been including foils because getting a few bulk foil Commons/Uncommons does add guaranteed value to a box — just don't expect to open a foil Mythic.
4. These prices won't be good for long. Remember, the idea is to determine if Oath of the Gatewatch is worth opening on release weekend. If you buy a box six weeks from now, don't blame me when these prices are wrong because I can tell you right now they will be wrong. Remember the EV is a snapshot based on current prices, not a prediction of where prices will be in the future.
5. Based on some confusion in the comments of past EV articles, let me make this clear: calculating EV is not a predictive exercise. It is a snapshot of value at a specific point in time. Kozilek's Return could spike to $40 at the Pro Tour (or crash to $5) and it wouldn't make this EV calculation any more or less true. The only thing we are concerned with is the current value of the card in the set.
6. You don't actually make a profit until you sell the card. Just cracking boxes on release weekend isn't enough. You need take the next step and actually trade away the cards, list them on Ebay/TCGPlayer, or sell them to a buylist.
7. Finally, be aware of variance. If you open enough packs these numbers will be accurate. But like most aspects of Magic, variance can have a huge impact in small sample sizes. In theory a booster box could contain zero Mythics and all bulk Rares, or it could contain a complete set of foil Mythics. The more packs you crack the more accurate the EV becomes because you smooth out these outliers. We'll talk more about statistics at the end of the article when we discuss the Expeditions.

Oath of the Gatewatch: Mythics

$ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00

First off, I wanted to talk a little bit about one of the anomalies on our list. As you've probably noticed, the cards are listed from highest to lowest price according to the MTGGoldfish (which uses TCGplayer-mid prices). However, for calculating EV, I use an average of the most recent eBay completed listing because I feel this metric better reflects what the average person can get for their cards. As a result, some of the prices at the top of the list look odd and out of order, with Chandra, Flamecaller being low and Kozilek's Return being high. This example reflects the relative strengths and weaknesses of these cards. In the case of Chandra, Flamecaller, even though her TCGplayer price is nearly $15, eBay users are paying much less, which suggests that her TCGplayer price is likely to drop in the near future. As for Kozilek's Return, eBay users are paying the full TCGplayer-mid for their copies, which represents strength and may mean that the current price of Kozilek's Returns sticks. 

Overall, the average value of an Oath of the Gatewatch mythic is $5.10. Together the Mythics add $23.43 to the value of a booster box. In comparison to other sets, this number is relatively low. During preorders, the average Battle for Zendikar Mythic was worth $6.81 and the average Magic Origins Mythic was valued at $8.26. While this comparison may mean the Mythics from Oath of the Gatewatch will drop less than the Mythics from other sets, it's too early to tell. It could be the values of cards at other rarities is above the norm and makes up for this weakness. 

Oath of the Gatewatch: Rares

$ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00

The average value of a Rare from Oath of the Gatewatch is $1.33, which ranks just above Battle for Zendikar, which averaged $1.26 and significantly below Magic Origins, which came in at $1.51. The biggest issue is true chase Rares are few and far between, which is partly because the set has a bunch of utility lands instead of a true dual land cycle (utility lands are usually worth less) and partly because people aren't completely sure what to make of this new colorless mana. There is a chance that Thought-Knot Seer is the second coming of Vendilion Clique, a Modern staple, and ends up being worth three times what it is today, and there is just as good a chance that making colorless mana is too much of a cost and these cards fade away into the land of snow mana and don't do much on a tournament level. At this point we just don't know.

All in all, the Rares add $40.89 to the value of an Oath of the Gatewatch box, which is reasonable but not exciting.

Uncommons/Commons/Bulk/Basic Lands

One area where Oath of the Gatewatch fairs extremely well is the value of the lower rarities, where ranks significantly above recent sets in value. There are several reasons for this surge. First, there are a handful of valuable Uncommons, and while the price of these cards will likely drop quickly, you should have a window to cash out if you open your boxes near the release date. Second, having Wastes as a double common adds a couple dollars to the value of the box. Finally, you still get full art basic lands, which represent guaranteed value, even if we value them conservatively at $0.10 each. 

All in all, the "other" category adds $15.93 to the value of the box and helps make sure you'll get something of value from your packs, even when you miss on chase Rares or Mythics.

Foils

As I mentioned in the methodology, I don't really like to count foil Mythics as part of the EV because your odds of opening one is quite slim (one per case). That said, the possibility of opening one does exist. Since including foil Mythics doesn't actually impact the box EV in a significant way (e.g. adding foil Mythics increases the box EV by less than 5%), I figure I might as well throw them in.

More importantly, lower-rarity foils are, more or less, guaranteed value. You are very likely to open at least one foil Rare and five foil Commons and Uncommons from any given box. I calculated the average value of a foil rare by using SCG retail prices and deducting a 30% spread. For Uncommon and Common foils, the average value is an approximation of bulk prices with Uncommons getting a slight bump because of the potential of opening one of the handful of semi-valuable foil Uncommons.

Putting it All Together

Much like with Battle for Zendikar, I wanted to post two different expected values, one without the Expeditions and one with the Expeditions. The odds of opening an Expedition in any specific box is relatively low, although slightly higher than we initially thought at the release of Battle for Zendikar. I don't want to accidentally give anyone the impression that opening any individual box is likely to be profitable. 

As such, if you open a box of Oath of the Gatewatch and don't get an Expedition, you can expect to open about $89.40 in value, which is almost exactly the same as the non-Expedition EV of Battle for Zendikar. While opening boxes is, by definition, an exercise in variance, Oath of the Gatewatch actually has less variance than a lot of other sets. The range of values across all rarities is relatively small (unlike Magic Origins where you win if you open a Jace, Vryn's Prodigy, but lose otherwise). Opening boxes of Oath of the Gatewatch should be relatively consistent. Obviously, if you hit an Expedition you win, but otherwise you are unlikely to make (or lose) a significant amount of money. 

The Expeditions

$ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00

We've learned two things about the ultra-rare Zendikar Expeditions since the release of Battle for Zendikar. First, they are not quite as Rare as we initially thought. Instead of one per case, it seems like they show up about 1.5 times per case, which means one out of every four boxes should contain an Expedition. This increase is good news. Your chances of opening an Expedition actually isn't that bad. On the other hand, because the Expeditions are less rare, they are also less valuable. Basically, these two factors even themselves out, and the Expeditions end up adding about the same amount of value to Oath of the Gatewatch as they did to Battle for Zendikar.

The bigger problem with the Oath of the Gatewatch Expeditions is many are lacking in value. In Battle for Zendikar there were a bunch of fetchlands that were worth $300 at release. In Oath of the Gatewatch, the only Expedition that valuable is Wasteland. Even though opening an Expedition in Oath of the Gatewatch is a win, it's not a huge money swing like it was in Battle for Zendikar. In fact, the average value of an Oath of the Gatewatch Expedition is $91.80, just over 33% less than the $137.25 average of the Battle for Zendikar editions.

All in all, the possibility of opening an Expedition increases the value of a box of Oath of the Gatewatch by $22.95, which bumps the with-Expedition EV up to about $112 — almost exactly the same as Battle for Zendikar. 

Conclusion

The moral of the story is that cracking boxes of Oath of the Gatewatch at current prices is unlikely to make you money, especially when you consider all the time and effort to move the cards. Sure, perhaps you'll get $115 out of a $100 box, but you'll spend hours and hours to make $15. Not really a good deal. If your goal is to profit, this set probably isn't for you. Should you choose to crack some boxes to build your collection or just to have fun, you should get your money's worth out of pretty much every box. The with-Expedition EV also means playing limited is basically free. While there is a ton of variance involved in opening three packs to draft, or six to play sealed, odds are you'll break even from the value of the cards you open. For me, Oath of the Gatewatch meets the approved list of sets for cracking. While I won't expect to make a profit, it's a ton of fun to crack boosters, so I'm okay with breaking even to have some fun. 

In the grand scheme of things, the prices of cards in Oath of the Gatewatch have to decrease over the short term. While there will be a handful of Rares and Mythics that buck the trend, when we look back at the set a few months from now, 90% of the cards in the set will be worth less — in some cases significantly less — than they are today. If you decide to crack some boosters, I'd look to sell/trade away anything of value that you don't need to play with immediately, then buy your copies this spring or summer at a discount. 

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