Should You Invest in This New TCG?

Should you invest in a new TCG?

You've got lots of options: There’s the League of Legends Riftbound TCG, or the Gundam Card Game. Hell: how about the Palworld TCG?

These new games are releasing into a new wave of TCG hype that has built off the back of established TCGs like Pokémon, as well as some other newer TCGs.

In particular: One Piece.

As I write this, I've learned that a One Piece card sold for a new all-time high: $713,700.

A sale of this magnitude is an enormous accomplishment for any TCG. For a TCG that is only 4 years old? Even more remarkable.

Alongside this record sale, One Piece appears to be thriving. Although I don't follow it closely, prices are continuing to rise across all kinds of cards and sealed product. There's no doubt collectors who have invested along the way are happy.

If you look at the returns, One Piece has been an investible TCG.

But, the attention these investing returns has gained is a double-edged sword. You don't need to look far to find cautionary examples...

MetaZoo anyone?

MetaZoo was a Pokémon-inspired TCG that thrived during its first two years of existence. The cards, which were designed to evoke Pokémon-inspired nostalgia, featured holo patterns and a water color art style that was very familiar to anyone who grew up with the early Pokémon games and cards.

The gimmick worked: Early releases, which had low supply, became very expensive very quickly. The early "investors" in MetaZoo, particularly the Kickstart backers, earned massive returns, causing word to spread to more and more speculators, who further inflated the market.

These early speculators were convinced they had captured the next Pokémon.

Along the way, and from the sidelines, I saw many claims that the MetaZoo playerbase was healthy. Despite this, it was hard to find anyone who actually took the game seriously.

By my account, the majority of the market for MetaZoo was made up of speculators who were fuelled by the ever-growing prices of their investments. The players and collectors who simply loved the TCG were few and far between.

And, as the number of MetaZoo speculators grew, and the market prices grew with it, MetaZoo fans convinced themselves they had captured lightning in a bottle: MetaZoo was destined to become the next Pokémon.

They thought they'd all be rich in another 10-20 years.

Instead, they created a market that was extremely fragile and about to crack.

Here's the risk most people don't understand about speculative bubbles: The more speculators in a market, the less it takes to burst the bubble. A speculative bubble doesn't need a price crash to pop, it simply needs the market growth to slow.

When speculators are expecting to double their money in 3 months or less, a 50% return over the course of an entire year - an incredible return by any normal standard - can trigger a mass sell-off, and create a snowball that truly crashes the market.

For MetaZoo, this snowball forced the market into bankruptcy 3.5 years after the game released.

So, when someone asks: "Should I invest in this new TCG?", all I can think of is the ocean of failed TCGs, like MetaZoo, that were destroyed by the very investors who tried to profit from it.

Before a new TCG has established itself, the idea of "investing" in it is not only risky for the investor, it also threatens the long-term success of the TCG.

Ironically, the best TCG investment might just be the TCG that no one thinks of as an investment.

As usual,

Thanks so much for reading the TCG Buyers Club newsletter. My name's Grey, I buy cardboard, and I'm on a mission to make collecting and investing in Pokémon simple.

Cheers 🍻

P.S. Thank you to everyone who reached out last week with some suggestions for my newsletter, I really appreciate it, and I promise to keep working on improving my research, writing, and perspectives 🫡