The MTGO economy is both predictable and unpredictable, depending on your familiarity with it. Because it is how you will obtain cards and/or booster packs to play with, it is the most fundamental part of enjoying your MTGO experience. You don't need to be an economics/finance guru to understand the basics of the MTGO economy - the supply and demand principle covers the majority of the aspects of the economy.
Event Tickets
The MTGO economy's primary currency is the Event Ticket, also known as "Tix". This is not a MTGO-sanctioned in-game currency, and as such the Event Ticket has only one official in-game use - paying part or all of an event's entry fee. Event Tickets cost $1 at the MTGO store - notably, some jurisdictions also are charged sales tax (or VAT). Every single Event Ticket in existence originates at one point from the MTGO store. You cannot purchase or otherwise obtain partial Event Tickets.
Secondary Market Price
Event Tickets: Historically speaking, the secondary market price for Event Tickets was as low as $0.80. WOTC has made two important changes which raised the secondary market price of Event Tickets: (1) began charging sales tax in large jurisdictions - as much as 20% more in some European countries and (2) allowed entry into many events (or required entry for certain events) entirely in Event Tickets, rather than the previously required 2-4 Event Tickets. #2 above significantly reduces supply of Event Tickets in the market, and can be a significant reason for secondary market price fluctuations. #1 also creates additional secondary-market demand from jurisdictions currently paying Tax in the MTGO store, since a secondary market source likely won't also be charging sales tax for that customer. The current secondary market price for Event Tickets can range from $0.90 to $1.10, depending on various factors.
Secondary Market Purchasing
Event Tickets: Generally speaking there are three options for purchasing Event Tickets:
Purchase from MTGO Store: Cost is $1 + any applicable Tax/VAT. There is no risk with this option.
Purchase from a well-known secondary market dealer: Cost ranges from $0.99 to $1.10. Typically these are made available for customers who pay tax to MTGO, and are otherwise not sold in significant volume. There is very little risk with this option.
Purchase from unknown user on MTGO: Cost ranges from $0.92 to $0.98 per Event Ticket. Legitimate sellers using this approach are looking to get a better deal than selling to a dealer; there is also a high amount of fraudulent tickets being sold in this manner, and as a result there is a significant risk in taking this option. See Fraud section below for more information.
Secondary Market Selling
Event Tickets: Generally speaking there are two options for selling Event Tickets:
Sell to a well-known secondary market dealer: Price fluctuates with supply and demand, but typically is between $0.85 to $0.93 per Event Ticket. There is very little risk with this option.
Sell to an unknown user on MTGO: Price fluctuates with supply and demand, but typically is between $0.92 and $0.98 per Event Ticket. This route has significant risk, as addressed in the Fraud section.
Fraud and Event Tickets
Because Event Tickets are treated as currency on MTGO, there is a large amount of fraud involved in transactions for Event Tickets. You can avoid fraud by doing transactions with the MTGO Official Store, or well-known secondary market dealers. For those choosing to work with lesser-known MTGO users, you should be aware of the following risks:
Stolen Event Tickets - Users use a stolen credit card to purchase Event Tickets from the MTGO official store. Once WOTC realizes what has happened, they will trade lock any account "downstream" of any such transaction. This means that any account that receives cards/Event Tickets in exchange for nothing "downstream" from the original fraudster will be locked and investigated. Usually investigations conclude after 24 hours. If you can prove you legitimately purchased these tickets using some outside payment source (like PayPal), WOTC will generally let you off and let you keep the stolen product. Accounts which consistently buy stolen tickets, or do transactions with users with the same information (same PayPal account, for example) can be subject to additional sanctions by WOTC.
Chargebacks - This scam is typically seen from buyers using PayPal to purchase Event Tickets, and can work in a variety of ways. The Event Ticket buyer is in some way using PayPal to perpetrate fraud, either by:
Using a stolen credit card on PayPal, which later is charged back by the bank backing the stolen card;
Using a stolen or phished PayPal account, which is later charged back by PayPal at the request of the original account owner;
Fraudulently claiming non-receipt of the items paid for (PayPal's policy provides no buyer or seller protection for intangible items); or
Some other "unknown" fraud-alert / PayPal investigation (the details on this are sketchy, but the end result is the same).
In all instances, PayPal will take the money from your account and you will have no way to retrieve the Event Tickets you already traded away. This charge back can take place as much as 180 days after the original transaction. Typically speaking, PayPal will offer you very little assistance or protection as the seller.
Actual Non-Receipt - When selling or buying Event Tickets, one of the parties has to send first. You are at the mercy of the other party to fulfill their side of the transaction if you've sent first. Some people mitigate this risk by breaking down the transaction into smaller parts.
Unknown - Fraudsters are forever coming up with new ways to fleece legitimate folks out of their money. Games like MTGO where value can be transferred in and out of the system very quickly are hotbeds for fraud. Always be vigilant, and if it seems too good to be true, it probably is.
Collection Management
Managing your collection is a critical part of your MTGO experience, as it determines what cards you have to play with. Further, as a collectible card game, how and what you collect is important to many players - and important to the overall MTGO economy.
On MTGO V4, the collection screen is also where you will build and edit your saved decks. WOTC has put out a tutorial that gives a broad overview of using the collection screen and making decks:
There are essentially two ways to get cards in your collection: trading and opening product. Trading is an integral part of the MTGO experience, and an integral part of the MTGO economy - you can read more about it in the next section. Opening product, as you know from earlier in this tutorial, is not something you should do. However, when you enter limited events (draft, sealed), the cards you get from the events go right into your collection. This is a great approach for players who enjoy limited events, but also want to build their collection; however, if you're looking for specific cards, it is almost always cheaper to seek out that card via trade (or purchase) rather than trying to obtain it via limited events.
Certain promo cards are made available by WOTC from time to time. They can be rewards for entering events, winning events, or buying things from the official MTGO store. WOTC will provide periodic announcements about promos which are available and how you can earn them. As with almost every card/product on MTGO, you can always trade for them as well.
Trading
When MTGO was first launched, trading was a lot different than it is now. Casual trading was very common, and there were a handful of large dealers that operated websites for singles sales - very much like the current paper market. Automated trading bots, or just "Bots", have completely changed the way trading occurs on MTGO. Casual trading and player-to-player trading is virtually non-existent in MTGO today; instead, most transactions go through Bots. Nonetheless, trading remains a staple of having a successful MTGO experience since it is how you will typically obtain your cards.
The Act of Trading
WOTC has a page explaining the basics of Trading:
Bots
Bots are computer programs that exist to perform specific actions on MTGO; the vast majority of Bots trade in some way. The software run by Bots is created by a third party. Most of the major dealers work with well-known Bot software or proprietary software that is not available to the general public. Most bots will buy cards, sell cards, trade cards, give away cards, or some combination of those. Bots are in no way supported by DBG, and therefore you should be extremely careful when choosing which bots you will use. Having said that, if you see a bot committing fraud or otherwise violating the Code of Conduct, you can report that to MTGO support and they will often take action against that account.
Trading with Bots
Most bots operate in a similar fashion when buying or selling cards, though there may be some differences. Generally, the bot will guide you through the trade process via prompts in the chat program. Bots typically operate on a credit system - if you buy or sell cards for fractions of an Event Ticket, they will save your credits for the next time you trade with a bot using that same credit system. As a result, most players will find a handful of bot chains that fit their needs as a player, and use those chains almost exclusively. See below for recommended bot chains. There are a handful of bot types:
Sell Bots - These bots are offering everything in their collection for sale. Click on a card to get a quote on that price. Some bots have a website that posts their prices and/or stock in real time.
Buy Bots - These bots are buying cards from your collection for tickets. Open trade with a bot of this type with the cards you'd like to sell tradable. Some bots have a website that posts their buy prices and/or desired quantity in real time. Generally speaking, buy bots will only quote what they "need".
Trade Bots - These bots are trading their cards for your cards. They work in a similar way to Sell Bots and Buy Bots, but trade cards for cards. Although MTGO Library bots fall under this category in terms of functionality, they can only buy or only sell as well.
Free Bots - Certain bot chains offer cards for free; the rules for how many and how often you can take cards may vary. See the MTGO ON A BUDGET section below to see a list of Free Bots.
Recommended Bot Chains
These chains have a large bot network, good bot software, extensive inventory, and competitive prices.
Trading with Humans
Although trading is dominated by Bots, human to human trading does still exist. Humans will typically indicate the fact that they are not bots by putting "Human" in their classifieds message. It is noted that the reasons bots have become so popular make trading with humans less attractive to newcomers on MTGO, including haggling, price misinformation, availability and difficulty finding stock. Some players actually enjoy haggling, and so trading with other humans may be ideal for those players.
Card Prices
MTGO card prices can be significantly different than their Paper equivalent. Prices can change very quickly on MTGO, and can fluctuate even during a single day. There is not any real "price guide" for MTGO, but most players use some combination of dealer websites to get a fairly good guess on a card's price. MtgGoldfish uses certain dealer prices which are updated throughout the day, and it has a very easy to use format for finding card prices. As a bonus, MtgGoldfish also includes paper prices as well as online prices. At the end of the day, the vast majority of a card's price can be explained using the supply and demand principle. What aspects of supply and demand are affecting a particular price at any given moment is ultimately the key in deciphering prices.
Supply Into the System
Supply of MTGO cards comes from booster packs - either opened packs, or limited events. Because the vast majority of players know the golden "don't just open your boosters" rule on MTGO, the vast amount of the supply comes from limited events, and more specifically, drafts.
The popularity of a set's limited environment therefore has a very large impact on the amount of supply in the MTGO system. Additionally, because most of the supply comes through limited events, the expected value of limited events often acts as a ceiling for card prices for currently draftable formats. In other words, if the prices of the cards in a set are so high that playing limited events becomes cheaper due to the value of what is obtained, players are incentivized to continue playing those formats until the supply is such that the prices of cards in the set no longer significantly subsidize the cost of playing limited events.
WOTC will sell an unlimited amount of boosters through its store at its MSRP, which often represents a ceiling for pack prices on MTGO. More commonly, the secondary market price for unopened boosters is less than the equivalent MTGO store price because of the supply of boosters in the system. Because boosters are given away as prizes for events, the amount and therefore price of boosters in the market is significantly impacted by not only how many boosters are awarded in prizes for events, but also (1) the entry for events
For example: Draft and Sealed events allow Event Tickets, Play Points and boosters for entry - whereas they payout typically only boosters and Play Points as prizes; as a result, the secondary market price of boosters at releases is often comparable to the MSRP.
and (2) the mix of boosters given out.
For example: which boosters are paid out for constructed events, which you can only enter with Event Tickets, can have a significant impact on prices - especially when you consider that constructed players are less likely to use those packs in a limited event, but rather are more likely to sell those boosters for additional Event Tickets to play more constructed events. The change to payouts in constructed events is intended to fix this problem by minimizing the number of boosters entering the system via constructed events.
Lastly, WOTC offers certain promotional and 'existing' cards via a product called Treasure Chests. Treasure Chests consist of some combination of cards from a 'curated list' (established by DBG periodically), randomly inserted rare/mythic rares from a Modern-legal set, Avatars, Play Points and Full Sets. The cards (and Full Sets) gleaned from Treasure Chests represent new additional supply coming into the system, and depending on the existing supply of those items, can significantly affect prices of cards of the same or similar version already existing on MTGO.
Supply Out of the System
There is only one real way for cards to leave the MTGO system - Set Redemption. In a nutshell, DBG allows you to "redeem" complete sets of cards for the paper version of those same cards. You give DBG the full set on MTGO, and receive the paper set in the mail from WOTC.
Set redemption is the only real link between the paper card supply and the MTGO card supply, and it can affect prices in both markets. Sets which are non-redeemable (either because they are older or simply designed only for magic online, like Vintage Masters) have no link between these markets. Set redemption has a very significant effect on the number of cards of a particular set available on MTGO, and therefore has a significant effect on the price of the underlying MTGO cards. You can even track weekly fluctuations in MTGO prices with the set redemption schedule. Additionally, certain card values can be significantly explained by set redemption - for example, mythic rare foils in redeemable sets. Some mythic rare foils are 5x, 10x or even 20x their non-foil price because set redeemers must collect one of each foil of the set to be able to redeem it.
Not noted above is the "market supply" of cards, which is a more difficult concept to track and understand. In essence, cards which are in the tradable supply are the key factors to determining the price factors related to supply. Players that own cards with no intention of trading those cards away, banned accounts, or other factors may prevent certain cards from being in the market supply. In many cases, cards can come into or out of the market supply based on the PRICE ELASTICITY of the person holding the cards, or personal factors of the person holding the cards (e.g., a collector quitting the game and selling their collection to a dealer puts those cards back into the market supply).
On a high level, cards which are or may quickly become part of the market supply encompass the short-term supply of a card on MTGO, and thus represent the supply side of the supply/demand equation in determining card prices.
Demand
The demand for cards is a very broad term, and is very fluid. On a very basic level, demand for a card is the number of people seeking to purchase the card at a certain price. As the price goes up or down, the number of buyers (and thus demand) may go up or down as well. There are a number of factors that affect overall demand for a particular card, most notably:
Playability in constructed - the more played a card is, the more demand there is. The better the deck a card is affiliated with, the more demand there is. Format playability is a very wide net because there are many different formats. Modern is the most in-demand format on MTGO, but also changes with new set releases. Standard, Pioneer, Legacy, and Vintage can all have an impact on the demand for a card, and a card which is good in one format is not necessarily good in another. How good a card is in a format can change rapidly - either when new sets become legal or illegal in a particular format, or once certain deck strategies are discovered and copied (which happens very quickly online do to the large amount of information available or during large-scale paper events, like Pro Tours and Worlds).
Finance / Speculation - the mtgfinance community has grown considerably in recent years as more and more people focus on the potential to profit from price movements in cards. This community is very quick to capitalize on price changes, and are a big reason why price changes on MTGO can happen so quickly. At times, certain cards may go up or down in anticipation of certain events such as set rotations, set redemptions and Ban & Restricted announcements. You can learn more about this community on Reddit (note: the discussion relates to both paper and MTGO cards).
Collectability - the collectability factor affects rare / lower supply cards more than newer sets. MTGO has certain very rare cards that can carry a very large premium. The markets for these types of cards tend to be very small and specialized. Foils and Alternate Arts can also be grouped into the "collectability" demand bucket; foils and alternate arts can be hard to price, with some actually being cheaper or only slightly more expensive than their unaltered counterparts.
Set Redemption - Set Redemption affects both the supply side and demand side of things. The demand for a particular set can fluctuate based on the paper-side price, the redemption schedule, redemption available stock, and the demand for the set in the paper market.