TCGPlayer has announced that they have been acquired by eBay for $295m.

eBay entering the world of trading cards

TCGPlayer is primarily a place for people to acquire and trade cards such as Yu-Gi-Oh!, Pokemon, and Magic The Gathering. 

EBay’s acquisition of the company is nothing to ignore: the deal is worth $295m and signals a clear intent to become more involved in the world of collectibles and trading cards.

One of the benefits that this move gives to eBay is that the infrastructure is already functioning and profitable on both sides of the equation, but that in the case of eBay there is very much a “one size fits all” approach, whereas TCGPlayer is a company whose UI and UX has been specifically tailored to meet the needs of trading cards and other such collectibles.

The ability to specialise and to focus on a niche industry is hugely advantageous for a company like eBay, which can use its influence and expertise to dramatically increase the quality of service for the acquired company.

Moreover, it seems that eBay is interested in seemly removing friction for hobbyists rather than dominating and commercialising the entire industry.  The VP of collectibles at eBay, Dawn Block, stated that:

“With TCGplayer, we can enhance the customer experience across categories, forge even more relationships, and cater to enthusiasts around the world”.

eBay facing increased competition in traditional sphere

In eBay’s traditional market of trading second hand goods there has been increase competition in recent years from the like of Facebook Marketplace, Amazon marketplace, and Depop, an app which has become very popular for girls to buy and sell second hand clothes.

Consequently, eBay’s market share appears to already have peaked and continues in a steady decline. Not only this, but demographically the users of eBay are becoming older and older, and eBay is struggling to keep up with advertising to the younger generation.

Depop is perhaps the best example of this, which operates exclusively as a mobile app.

Will eBay focus on digital assets next?

The NFT market is huge, and many components of it are no different than in the world of trading card games like the aforementioned.

For many, an acquisition such as this foments ripe territory for exploring a pivot to the digital asset space.

Some of the trading cards that people trade on this site are worth a lot of money and are extremely  rare. This is evidenced in the way that some of the most vocal supporters of card collecting, such as Logan Paul, spend millions of dollars a year on their hobby.

Paul also understands the attraction of NFTs and the value in their scarcity, but is an interesting case in that his involvement in recent events has exposed both the limitations of trading cards in the physical space and the potentially perilous consequences of using public blockchains.

In the case of the former, Paul bought a box of rare Pokemon cards for $3m that turned out not to be legitimate. How could this happen? People buy fake merchandise all the time and when the stakes are so high, there is a huge incentive to do it – eBay already has a solid authentication system that they could use to improve a company like TCGPlayer.

This sort of thing cannot happen in the world of NFTs, where is very obvious if something is fake because it can be easily verified.

However, in the recent Tornado Cash debacle Paul’s public wallet was sent some ETH from the Tornado mixer, which meant that he was potentially in breach of US sanctions.

The current way in which self custody works is that the custodian of the keys bears responsibility for which wallets it interacts with.  It is quite possible that for privacy and compliance reasons, many NFT holders would prefer to use a centralised platform rather than manage their own keys – contrary to the many mantras of maximalists, a lot of the public will choose convenience over responsibility.

It makes sense that eBay could use its experience, network, and expertise to improve upon the NFT space in they did decide to enter it, although that remains to be seen.

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