Wizards of the Coast sends takedown notice to organizers of fan-made ‘Magic’ NFT project

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A screenshot from the digital Magic: The Gathering Arena. (Wizards of the Coast)

The company behind the popular collectible card game Magic: The Gathering has sent a takedown notice to the organizers behind mtgDAO, a fan project that planned to build an NFT-based economy around Magic in the name of enabling a different style of play.

The notice was sent Feb. 4 by Wizards of the Coast’s lawyers to mtgDAO, which revealed it via its Twitter account on Feb. 10. The notice also divulged that “Wizards is currently evaluating its future plans regarding NFTs and Magic: The Gathering cards,” but had yet to make a decision on the issue. That, in turn, caused a weekend-long discussion of the topic on social media, in case you were wondering why Wizards was trending on Twitter for most of the weekend of Feb. 11.

Wizards of the Coast, headquartered in Renton, Wash., has published Magic since its creation by Richard Garfield in 1993. In Magic, players battle against one another with custom-made decks of cards, which are bought in random lots such as booster packs.

Wizards encourages the collectible aspect of the game by specifically limiting certain cards’ print runs. Rarer cards may not be specifically more useful or potent than “commons,” but do tend to offer more complex and/or interesting styles of play. As a result, there’s been a big secondary market for Magic almost since the game’s debut, with particular cards regularly selling for two- and three-digit sums.

The point behind the mtgDAO project, as per its publically-available whitepaper, is to address that. The anonymous author of the paper argues that due to the steps Wizards has taken to ensure cards’ collectability, as well as Magic‘s constantly-shifting tactical landscape, the Magic secondary market operates as a sort of fiat economy. A card’s value could skyrocket or crater at any given time, based on what Wizards decides to do next.

“I want to bring the concept of sound money to the Magic economy so players can trust the scarcity of their investments,” the anonymous mtgDAO author writes. “I believe that this protocol can build an ecosystem with enough transparency where the sky’s the limit on what some people will want to invest. I think we can build and retain a massive amount of value in the community we create.”

“In the short term, we can have a ton of fun exploring a new format that allows a depth that has never been possible before. In the long run, I think there’s a chance we can just buy the Magic brand from Wizards of the Coast. mtgDAO could be the next evolution of what this game and this community is and how it is operated and controlled.”

A metaphorical representation of what Wizards’s lawyers may do to the mtgDAO project. (Wizards of the Coast promotional image)

According to the whitepaper, this would be done via a “crypto NFT card economy,” where a player would have to show proof of ownership of an NFT for each card in that player’s Magic deck. MtgDAO is careful to note that “we are not creating NFTs licensed by WotC, only adding an additional layer of scarcity to be able to play Wizards’s cards in a new format. Players will need the actual card in order to legally play the game, whether that be a paper card, a card on [Magic: The Gathering – Arena], or a card on [Magic: The Gathering Online].”

Wizards of the Coast apparently does not consider this to be a compelling argument. In its cease-and-desist letter, its lawyers state that it is “the exclusive right of the copyright owner to reproduce the copyrighted work, such as a Magic card, in any format. White there is an exception in the copyright statute for making a backup or ‘archival’ copy in some circumstances, ‘this privilege extends only to computer programs and not to other types of works.’”

The letter asks that mtgDAO refrain from implementing its planned NFT-based Magic community. We’ve followed up with Wizards for more information.

mtgDAO’s counter-argument is that it’s using the tools of Web3 to build a community, similar to a local game store, and accuses Wizard of holding a reactionary position.

The cease-and-desist highlights how bridging the physical and digital world in the new world of NFTs presents new challenges for groups such as mtgDAO.

“Intellectual property laws apply equally to web 3.0 firms as they do to any one else,” said Jesse Proudman, co-founder and CEO of the Seattle-based crypto investment firm Makara, in an email to GeekWire. “Entrepreneurs innovating in this space will need to find ways to bring new products to life without infringing on the rights of existing brands.”

Notably, Wizards’ parent company Hasbro has already begun to explore NFTs on its own, beginning with a Power Rangers-themed collection that it released on the WAX blockchain in Oct. 2021. It’s unlikely that Wizards’s position here is due to a conceptual opposition to NFTs, but instead, the company is simply acting to enforce its copyright.



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