The author | Song Wanxin
Editor| Pan Xinyi
On a platform called mtmintcard, tens of thousands of "trading game cards" are traded second-hand. Although they are all game cards, the price difference between different cards ranges from a few yuan to hundreds of thousands of yuan. In addition to the value, the "function" of the card itself is only applied to the tabletop competitive game.
The reason why cards can circulate in the second-hand market is because in the set of cards of "exchange" games, a small number of "strong cards" are in short supply, and having "strong cards" undoubtedly means the improvement of the game's competitive ability. When cards are rare enough and there is enough demand to acquire them, second-hand or even auction markets naturally form.
Not limited to trading game cards, sports (star) cards, entertainment cards, board game cards, all cards with certain IP attributes, can be transferred between players and players.
It's just that such a market without regulation is changing. A "game king" blue-eyed white dragon card auction bid to 87.32 million yuan was stopped, more than 1,600 illegal entry star cards were seized, and live card dismantling "gambling" organizations were arrested - like all industries that were found to be "profiteering", the boundaries of the rules were constantly tested.
Although the game is supposed to be pure, "pure" is not enough to make the market prosperous. Without gambling and hype, how big is the market plate for card games?
01 Cards such as the stock market
"There are two types of card players, one is to play games, and the other is to collect." Veteran star card collector Kong Wenrui told 36Kr. With the maturity of the domestic market and the increase in players, a third type of person has emerged: those who engage in "investment".
Due to the different number of different types of cards in circulation in the market, it is basically divided into high rare and low rare universal cards. The latter is basically only used for normal game use, so the price is adjusted within the range of market demand, while the former has collection value and appreciation space according to the rarity.
The exact number of cards in circulation is determined by the developer, who usually produces cards in the name of "reserved list" or "limited edition", indicating the number of cards issued per card. In other words, card merchants are game-maker, and they have a sophisticated card rating and value evaluation system to maintain scarcity.
For example, in the world's earliest exchange card "Magic", in 2002, a first alpha version of the Black Lotus cost $500, and now on the card trading platform, this card has risen to $70,000, 140 times in 20 years, and the most issued version of the card is one grade lower, the latest price is $17,500.
Mtgmintcard card trading platform
The high-hanka that has been circulating in the second-hand market is becoming more and more expensive, and the price of ordinary packages (boxes) is gradually diverging. That is to say, there are only two ways to obtain rare cards, either directly buy a specific card from the second-hand market at a high price, or fight for probability, buy a large number of new cards into boxes to bet on whether rare cards can be issued, and "open blind boxes" is the same.
Obviously, if you pursue investment through cards, buy low and sell high, you can only take the second way.
When Kong Wenrui first collected star cards, the market was not like this today.
He told 36Kr that in the early years, everyone could only go to physical card stores to buy cards, in a single way, even if some stores had means, they would not be so frequent. Until last year, the circle began to popular "crowdfunding" form of opening the box, so that Kong Wenrui felt that he had gone astray.
The crowdfunding of the card circle, the general operation method is that on several app specializing in crowdfunding, initiated by card merchants with certified qualifications, consumers who buy can share the price of a box of cards. Due to the exponential rise in the price of box cards in recent years, the market average has been pulled to 1,000 yuan per box, and the input-output ratio of individuals opening a whole box of cards is getting lower and lower.
With the mentality of reducing costs and increasing probabilities, "crowdfunding" is becoming more and more popular.
"What is the essence of the card?" I bought a box of cards, and whether the cards are good or bad, I will at least get the 'product' of the card. Even without rare cards, I harvested a pack of cards themselves. Kong Wenrui emphasized the word "product".
He made an analogy, after having crowdfunding, it is equivalent to an individual wanting to spend 50 yuan to "fight" a value-added big card, and the probability of obtaining a high han card is still infinitely close to zero, "almost "spending money to buy air", the attribute is very much like gambling." Another insider analyzed the psychology of crowdfunding participants, just like "the buyer smashed the golden egg and wanted to hit a house", putting the cart before the horse.
Extreme mentality is always easier to spread in the context of the Internet, and live broadcasting, as the channel that can directly grasp the psychology of consumers, has become a good harvest.
In January this year, Huaheng Star Card Club was in the process of douyin live card removal, the live broadcast room heard a police order, and in the next few tens of seconds, all the card club members were arrested and broadcast live in front of the camera. After a dramatized scene, many card companies immediately stopped the daily card removal live broadcast.
This is the first new type of online gambling case of star card in the country detected by the Hubei police, but it is clear that under the sea, more than one card company is wandering in the gray area.
The form of huaheng star card club card dismantling is exactly the popular way of playing in the live broadcast circle of card dismantling, known as "group pk", that is, high-price betting, after opening the pk card bag rare card point size, the winning party gets all the cards and cash.
It's almost a card-clad business of gambling.
In the circle of star cards, there are very few people like Kong Wenrui who only collect, and they will basically be resold. This side shows that there are not a few people who are willing to "take over", and the market is in a highly active state.
In a way, the second-hand market for cards is the same as the stock market.
"Fry high, find countless retail investors to take over, cut leeks", these secondary markets are usually dramas and processes, Kong Wenrui also often witnesses in the card trading circle, "cards are like a financial product that suddenly heats up, and the gang that comes in with capital to speculate must be the most profitable." ”
"Investment" is naturally not guaranteed, and cards also have the risk of depreciation. Some senior players pointed out that Magic owner Wizards is very cautious in card reprinting, so the value of a single card is more preserved, but Konami's game king often reduces the rare reprint to improve the probability of opening, resulting in a drop in the price of the card in the player's hand.
02 Who harvested the leeks?
The second-hand market is at the bottom of the overall industrial chain, and the value of cards here has doubled, but the benefits have also been transmitted to the more upstream links.
Take trading game cards, for example, which include copyright owners, distributors, and rating agencies. Wizards, Pokémon, Konami, etc. own Magic are the top several copyright owners; dealers are divided into wholesale and retail, and regional agents with concentrated distribution rights have the ability to control the supply of cards; mainstream rating agencies have PSA and BGS, many of which were formerly based on stamp or coin collection, and cards accounted for only a small part.
Although the second-hand market is far from copyright and distribution links, and soaring transaction prices do not directly enter the pockets of upstream manufacturers, the high frequency of downstream hand-changing transactions is undoubtedly linked to the rise in issuer sales.
The common good is eternal. To some extent, this has led to a kind of implicit "conspiracy" between copyrights, distributors and platforms and the secondary market, catalyzing the heat of card circulation.
A card circle person told 36Kr that in the real card circle, some card dealers collectively sweep up the price of goods, speculate on rare and expensive cards and other operations, which is an open secret. The copyright owner designed and launched a variety of "limited editions" from the beginning, which also directly provided soil for downstream scalping.
Generally speaking, the first- and second-hand trading of various types of cards is carried out on mature trading platforms, such as the card tao of the star card, the card game of the anime IP card, and the mtgmintcard of the exchange card. In addition to this, more transactions are also based on "acquaintance relationships", and many retail card stores will form their own WeChat or QQ groups.
Katao is the largest auction platform in the star card circle, and the operation mode is similar to Taobao in the card circle. A large number of offline card retail stores operate online stores on Katao, and use the private domains of QQ and WeChat groups to divert traffic from each other.
"Circles" are particularly important in this market. High-value transactions require a high level of trust, and frequent transactions in turn strengthen the social circle of both parties to the transaction.
In a certain star card QQ group of nearly a thousand people, 36Kr saw that a Kobe signed card was being auctioned in Card Tao, the time was only the last ten minutes left, and the card collectors advertised it in the group, "Kobe Sign Card, the last 10 minutes, low price", the accompanying Card Tao trading interface shows that this Kobe Card has been auctioned 40 times, and the latest price is 11555 yuan.
There are countless similar group chats, the dialog box is crowded with card exit and card receipt information, various card photos with simplified description text - "new pz25 compilation" "out of the First Year mosaic 1/1 nebula" and other terms in the circle, as well as many people to provide proxy shooting services.
The above-mentioned card circle sources revealed that the card needs to pay a deposit of 1,000 yuan to sell cards in the card tao, and the final cut-off price platform will draw another 5%.
As can be seen from the card tao platform, the highest price of cards at auction currently exceeds 150,000, that is to say, a similar high-han card platform will earn thousands to tens of thousands of yuan. According to the data, The GMV of Katao last year exceeded 600 million yuan, with a year-on-year growth rate of more than 300%, and the monthly GMV reached a maximum of 50 million yuan.
Card Tao trading platform
Katao has a history of 7 years, and the company only accepted the first external investment at the beginning of this year, from the "generation of demon stocks" Yao Ji Technology, with a shareholding ratio of about 38%.
Yao Ji Technology started from playing cards, and in 2018, it achieved game revenue exceeding the main business income through the merger and acquisition of a series of game companies, but also because of mergers and acquisitions, Yao Ji Technology generated more than 60% of its net assets.
An investor close to Yao Ji told 36Kr that for Katao, Yao Ji may eventually acquire.
"Yao Ji has previously incubated some studios and released slots and casino card games overseas, which are essentially casino games." The investment in Katao is actually a copy of Yao Ji's overseas experience in China.
More card dealers who get ammunition are rolling out the channels. At the end of last year, Beijing, Shanghai, Shenzhen and Chongqing simultaneously opened four "card tours", an offline store specializing in ultraman exchange cards. The main company behind it, Kayou, just got Sequoia Investment a few months ago and gave a valuation of $1 billion.
Sequoia, who had successfully invested in Bubble Mart, bet on card games again, almost applying the vision of "Bubble Mart" to the "Blind Box of The Card Edition", hoping to cast a "Bubble Mart of the Card World".
The "gold mine" in the eyes of investors attracts a large number of minors. Some parents said on social platforms that the card tour store is like a small exchange, and many primary school students hold thick card books to change cards and sell cards in the store. The store has set up a number of "card draw machines", a single draw of 10 yuan, you can choose "10 consecutive draws", "5 consecutive draws" and "2 consecutive draws", the parents who pay the bill directly call "too much money".
Like other card dealers, Kayou produces its own cards with the authorization of the anime copyright owner and sells them through its own stores or distribution channels.
Some VC investors said that Kayou has achieved about 3 billion yuan in revenue in 2020. This data has not been confirmed by Kayou, but in comparison, it is comparable to the revenue of 2.5 billion yuan of Bubble Mart that year. Bubble Mart now has a market value of less than HK$50 billion, nearly 70% from the high point of HK$150 billion, and the card has successfully undertaken investors' expectations for the blind box business.
03 Capital entry
When the Wuhan police arrested the card gang earlier this year, a thousand kilometers away, a card dealer handed a prospectus to the Hong Kong Stock Exchange.
Founded in 2004, Yunyong Holdings is the originator of the exchange card agency and is now the largest card game giant in the Asia-Pacific region.
In terms of business model, Yunyong is a pure agent, and the prospectus shows that Yunyong is mainly engaged in the downstream B2B wholesale business of games and collectibles, which is divided into three blocks: sub-distributors, resellers and retailers, in addition to retail and distribution business.
A person close to Yunyong told 36Kr that Yunyong entered the Chinese market early, and focused on exchange cards and Japanese cards, and the channel resources accumulated over the years were relatively strong.
From the prospectus data, it can be found that Yunyong's business architecture has changed in recent years. During the nine months from fiscal 2018 to the first nine months of 2021, the proportion of yunyong wholesale revenue continued to rise, rising from 72% to 95.4%, while the retail business slid from 28% to 3.7%.
Yun Yong mentioned in the prospectus that core exchange card game players generally make large purchases, resulting in a decline in the retail price index, and the wholesale price index rose from 100.0 in 2015 to 111.9 in 2020.
As the company's business gradually becomes highly dependent on wholesale, revenue and profit have risen. During the Reporting Period, Yunyong's revenue increased tenfold, especially in 2020, from HK$227 million in the previous year to HK$1.012 billion, and the net profit attributable to the company's owners also increased tenfold, from HK$14.145 million to HK$138 million.
Capitalization is intensively targeting the card industry. In the middle of last year, Holley Technology, a leading amusement equipment distribution and operation service provider, was listed on the Shenzhen Stock Exchange, and what attracted the attention of the market was the company's newly laid out IP card business, especially Ultraman cards.
IP and offline game equipment two big concepts leaning over, at the end of last year in the meta-universe tide, Holley Technology also in the secondary market to harvest 20cm limit.
Holley Technology's sales method is mainly to put card machines in cooperative playground stores such as big players, Wanda Baby King, Aeon Fantasy, etc., and consumers buy cards on store equipment.
In the financial report, from 2016 to the first half of last year, the proportion of Holley Technology amusement machine sales business decreased from 88.1% to 39.6%, while the proportion of animation IP derivatives (card) business revenue increased significantly from 5.5% to 32.7%.
Southwest Securities is optimistic about the card business as a new growth point for the company. According to the data, holley technology IP derivatives business revenue in 2017 was 20.41 million yuan, 68.22 million yuan in 2020, and 50% cagr from 18 to 20 years, of which Ultraman card revenue contributed more than 60%. In other words, just by selling Ultraman cards, the company has more than 40 million yuan in the account.
Compared with the lower gross profit margin of playground and equipment operation, the profit of card-based IP derivatives is much thicker.
Holley Technology's financial report states that the gross profit margin of "Ultraman Image Card", "Pokémon Image Card" and "Super Dragon Ball Image Card" exceeded 30%, with the highest reaching 39.4%. In the already profitable toy industry, this data is still conspicuous, basically equaling the gross profit margin of Kidsland, the largest toy dealer in China.
It seems that there is a lively scene everywhere - capital entering the "milk" industry, the second-hand market is hot, but when you look at it, the cards are still a carnival of a small group of people.
Yunyong's prospectus compares the size of the trading card game with the popular toys, game consoles and other game markets, and by 2021, the trading card game, which has emerged from overseas, will only have a volume of HK$2.4 billion in the Asia-Pacific region, accounting for only 1.3% of the total 190 billion market for games and collectibles.
Source: Prospectus of Yunyong Holdings
"Although (physical) card games already have a certain core player in China and are very stable, it is still not easy to attract new consumers and go out of the circle, which is the challenge we face." Liu Hongfeng, general manager of Board game leader Asmodee China, told 36Kr.
The direct reason for the difficulty of getting out of the circle is the high threshold. On social platforms, there are many posts that want to get started with trading cards for guidance, and the responses of players in the circle basically revolve around several points: the complex mechanics and rules of the game itself, the determination of whether they are competitive players or collectors, the economic basis for affordable expenses, and the second-hand market scams that can be avoided as much as possible.
Obviously, before understanding these questions, most novices have been dissuaded.
There is also such a suggestion in the "beginner's entry" of the official website of Katao: At present, most players in China rely too much on transactions to obtain money, and ignore the exchange, in fact, the exchange can better reflect the playful nature of the set and exchange cards.
The card market is showing a kind of fragmentation, that is, among all audience groups, second-hand market players are louder than gamers, and they have attracted more attention, and it is undeniable that the former is also an important part of the industrial chain and effectively drives the expansion of the industry.
As the head trading platform of the card circle, the mood after such an industry observation may be very complicated. How to drag public attention from those exaggerated auction prices back to the game itself is the beginning of everything in the future.
(Kong Wenrui is a pseudonym in the text)
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