Card Rebalancing, Card Oversupply and Economic Considerations in Digital Card Games

Previously: Artifact Embraces Card Balance ChangesCard Collection and OwnershipCard Balance and Artifact (good comments on that one and on the current one)

Note: The rest of the series does not require or rely on this post, so it can be safely skipped. Original version of this post contained a gigantic false assumption. I understand how I made it, but it was still pretty bad, and if I had a SlateStarCodex-style mistakes page it would be my first entry. The post has been updated to reflect the new information, and may be updated further as more implications are thought out.

VII. Card Rebalancing, Pack Supply, Pack Value and Economics

What happens when a game periodically rebalances its cards?

There are several distinct effects.

In the second post, I considered the question of card collection and ownership. This section is partly reiteration of key points from there, then expands upon them. I want to get the economic aspects out of the way now, so the remainder of the series can consider other factors.

If cards are frequently altered for balance reasons, or to shake things up, then a card becoming valuable and worthwhile creates a large risk that its value will be diminished or wiped out by a future change. This transforms the long term payout expectations, forcing the value to lie mostly in shorter term utility and severely hurting long term collectibility. So that’s potentially quite bad.

The good news is, you can choose how much to care about that. Both as a game and as a player. In Slay the Spire, ownership wasn’t a thing, so changing the cards up was totally cool. If you use the dust system of Hearthstone, cards cannot be transferred, and are created and destroyed for fixed amounts. As long as you offer full refunds when changes occur, which is cheap to do, it’s hard to get too angry about changes.

One could certainly argue that a player chooses to create and aim towards a variety of cards in order to build a deck, and killing one card in the deck could kill the whole operation and leave your collection crippled. But a new set often does the same.

At the time I fully supported Artifact’s decision to have a true marketplace: a fully collectible, buy-packs-and-trade-cards economy, when cards were not going to be rebalanced and card ownership was at a higher level. 

still strongly believe that the marketplace model is good for the right game, with the right supports. I am still planning to use it, but it requires extensive supports and has to be central to what you are doing, at least as much as in paper Magic: The Gathering.

This can break on multiple levels.

I believed when first writing this that prices have now dropped dramatically, across the board, since the announcement, and that the change in ownership level was the cause.

That turns out to be completely wrong, and is the mistake noted at the top. There was basically no adjustment in prices in response to the announcement, other than for the modified cards, and even those cards didn’t move much.

Prices are still down a lot versus before their early peaks when there were more players, and before (presumably) a bunch of players dumped their cards. But that is to be expected. Given the timing observed, it’s a pure oversupply and not enough demand story. McCarthy’s model in the comments is a good way of thinking about it, and fully compatible with my description.

Given that a large decline in card ownership did not in the short term hurt prices much, does that mean the two are actually fully compatible, and I was far too worried about this issue?

That certainly needs to be considered. My current view is that rebalancing cuts off key potential sources of value, especially the possibility of super high long term value. In the long term that will impact prices a lot. But in the short term, other factors can easily dominate.

To give an idea of where prices are now, I will show prices as $Bid/$Ask.

Drow Ranger is 3.5/4.5, and Axe is 6.5/8.7. They remain the most expensive heroes, despite becoming worse, because Artifact bought so many of them back, and they are now rarer. Everything else has taken a tumble. Only three other heroes, Kanna, Lich and Tinker, cost over $1, with Kanna highest at 2.3/3.2. The only item worth more than $1 is Horn of the Alpha at 1.5/1.9. The only red cards are Time of Triumph at 2.6/3.6 and Spring the Trap at 1/1.4. Green has Unearthed Secrets for 1.2/1.7 and Emissary of the Quorum for 1.3/1.7. Black’s most expensive non-hero card is The Oath for 0.8/1.1. Blue has Annihilation for 4.1/5.5, Bolt of Damocles for 1.1/1.2, and Conflagration for 1.1/1.2.

Most rares are worth pennies. There is not a single bid for a common or uncommon that is higher than the $0.05 you get for breaking them down for event tickets. Legion Commander is uncommon. She used to cost over a dollar and be the second best red hero. Now she is the best red hero and has a buy cost of $0.09.

Pack value certainly looks well below the $2 base cost, even with multiple rares in many packs, as there are only five cards whose buy cost is over that price. You can turn twenty commons into an event ticket, but that only gets you about $0.50 at best you need the rest to come from somewhere.

If you don’t, you have the issue that has plagued Magic Online for years. Why would anyone ever buy a pack?

No one smart ever buys a Magic Online pack in the store. Ever. Same with Artifact, now. Much, much better to buy the singles you need.

Thus, all packs now come from the initial packs for new accounts, and the packs granted as rewards from play and from prize queues. These packs then are partly dumped onto the market for peanuts, the bot traders take their cut, the game and steam take their 15% cut (which is the big change in Artifact versus Magic Online, and the main reason the markets in Artifact are so wide), and constructed players buy the singles for play.

If this system fails to dump enough cards into rotation, prices rise until you hit the soft upper bound and packs are worth buying again. If the system dumps in too many cards, increasing fractions of all cards go down to worthless, or redemption-for-tickets value, as we see today.

This new balance is very bad news for Valve if it is looking to sell packs. It is very bad news for existing collectors.

This new balance is very bad news for those who play the prize queues, because the value of their prizes diminishes. With packs worth pull price, prize queues in Artifact return most of their entry fee, making them a great way to keep players engaged and motivated. With packs down by half, the break even point becomes sky high, and the average player will not get much reward. Add in the appeal of getting cards via grinding or purchase, and the appeal of prize queues for non-competitive players seems quite weak.

This new balance is great news for players who want to play the game cheap, and now face mostly minor hassles rather than major expenses.

Now that cards are going to be rebalanced, players have expressed preference for a different type of play loop, prices have dropped and card ownership is at a lower level, that has a lot less appeal. The economic model was, in this context, an error. It is superior to the Hearstone-style freemium model, and time will bear that out.

A better solution, I now think, would have been the living card game. Players buy the game, its sets and expansions for fixed fees. Further purchases would be for chromatic items only. It would not be easy, for many reasons, to get there from here at this point, but I think there would be a very good payoff if it could be done.

What we do not have, it turns out, is any evidence that card ownership levels impacted card prices. Players did not, in the short term, think like that or let it impact their purchasing or selling decisions. I still believe strongly that it will have long term impact, but the results, and having my assumptions about what happened turning out to be so off the mark, has to give me pause. Is the rate of change of the player base and the resulting card overhang the only thing that makes that much difference in the end?

It might be. In that case, card rebalance would continue to help prices, so long as players like it.

A thought experiment: What would happen if cards were rebalanced frequently, but all cards had to come from purchased packs, or supply was otherwise kept low enough that there weren’t enough cards to go around?

Players would still be reluctant to collect and save cards, due to risk of changes diminishing value both of particular cards and in general, and the overall decline in quality of ownership. That makes this scenario harder to get to without severely restricting card supply. It also means that if you do get to this scenario, you have a situation where cards in this short supply would otherwise ‘want’ to be much more expensive, which would translate to lots more packs sold and cards available, assuming packs are for sale at all.

However, if supply were sufficiently credibly constrained relative to demand, I think this would work.

Consider a world with fixed supply. We issue 100,000 copies of each of 100 rares, 300,000 of each of 100 uncommons, and 1,000,000 of each of 100 commons, plus unlimited copies of 50 basic cards. And that’s it, distributed in some fashion and with a market. Every two weeks, we change 5-10 cards in the biweekly patch, 1-2 of which change completely the way Cheating Death did, with the aim of shaking things up. We commit strongly that there are never new expansions, and we will never print meaningfully more copies of anything beyond a fixed amount held in reserve (or we do so only to replace cards that are ‘lost’ in permanently inactive accounts and so on).

The value of a full set is now mostly a function of the popularity of the game, with some weight on how many of the quality cards are rare, and some weight in how much everyone wants the same cards. All weights act as multipliers on the effective size of the player base.

If we have 50,000 players (and collectors), all cards will be almost worthless. If we have 500,000, perhaps not. If we have 5,000,000, definitely not. The risk that the value would be redistributed periodically does not seem able, in this thought experiment, to hold the value back by that much. Again, provided supply is constrained sufficiently. 

Another way of putting it is, we’ve cut collection value by some factor, but it is a finite factor, and laws of supply and demand still hold. We just need to ensure sufficient demand relative to supply. To do that, we’d need to not have enough cards for the players, making them choose what to own and when and actively manage these questions, so the number of cards in circulation relative to player count has to go down quite a bit. It can be done, but it hurts.

It is also incompatible with a generous (or likely, even a reasonable) reward system for initial purchase and for playing. We can’t have too many ‘surplus packs’ in the system, or be injecting them into the system periodically, or be expected to do so in the future. The combination leads to the worthless-pack world, and the worthless-prize world.

Which is fine! Potentially. As long as the revenue can come elsewhere, and the motivated play loop come elsewhere, such as from tournaments organized from the outside. As I write this, I intend to at least start a qualifier for one such tournament later today, if only to see what such play is like.














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11 Responses to Card Rebalancing, Card Oversupply and Economic Considerations in Digital Card Games

  1. scmccarthy says:

    > Prices have now dropped dramatically, across the board, since the announcement.

    As far as I can tell this is completely incorrect. Prices had already dropped to roughly their current levels over the period of time between full public release and the patch. Here is the chart for Time of Triumph – a fairly valuable rare that wasn’t nerfed. (I also went for one that isn’t blue because I know blue has become a lot more popular and I didn’t want to overstate my case.) I’ve annotated it with the dates of the two patches, “1.2” being the balance changes + dump free packs into the system patch.

    Note that the patch 1.2 changes were announced and released December 20th, roughly between 5 and 6 PM PST, which is the timezone shown in my image. Time of Triumph’s price is currently *up* 40 cents or so from that moment. Also note that prior to the patch note release at 5:45 PM they had not even hinted that they would make balance changes, at least that I can find.

    You can look at the price graph of artifact cards here:

    I also checked out Phantom Assassin, a popular uncommon hero, and it was already down to 3 / 5 cents prior to the patch. No crash.

    I wasn’t actually expecting this result when I went to look it up. I thought you were exaggerating but I’m not even sure prices dropped at all. I would have expected some drop due to the announcement that they were giving out a stream of free packs just for playing the game. But it’s also hard to disentangle prices from player trust in the long-term existence of the game, which I’m guessing counteracted that.

    • TheZvi says:

      Huh. I will edit to revise this section, assuming that you have it right. I suppose my check pre-patch wasn’t close enough to patch time, and I assumed the drop couldn’t be that dramatic before hand. But it turns out that once you cross a threshold of supply/demand prices drop to zero so perhaps the daylight of $1 -> $0.05 is very small.

  2. scmccarthy says:

    Here’s my take on the prices, seeing that they just tanked at launch and then eventually stabilized at low levels. While there are other factors I want to concentrate on one particular perspective here:

    Valve released two similar games and gave them very different prices.

    Constructed Artifact cost $300 (at launch), but with two pleasant caveats. 1) You can buy in partially. 2) You can cash out partway through and get a refund for the remaining value of your cards. CCG regulars might predict your cards’ lifetimes to be 2 years or more. So maybe if you cash out after a year you get half back. Also one unpleasant caveat: they’ll probably release more sets so you’ll have to keep buying in.

    Draft (and Precon) Artifact cost (at launch) approximately $0, probably a couple bucks. (It comes with 20 packs which you open and sell to Constructed players to pay back the purchase price of $20. It also comes with 5 tickets which you may be able to parlay into a few more packs.)

    More people thought Draft Artifact was a good deal than thought Constructed Artifact was a good deal. Surely because it’s way cheaper, and perhaps because the alpha testers mostly said draft was actually a better game.

    Every person who buys into Draft Artifact makes Draft Artifact more expensive (up to a maximum price of $20) and Constructed Artifact cheaper. Vice versa for everyone who buys into Constructed Artifact. I suggest that this is the main thing that has happened that affected card prices.

    According to, EV of a pack is currently $1.30. If we ignore the complications introduced by reducing initial packs to 5 and giving out more by leveling up your account, and guess that the average player wins 1 pack with their tickets, then the price of draft would be about $20 – 11 * $1.30 = $5.70. Meanwhile the price of constructed (for a full set) is down from $300 to about $150.

    I believe that people buying Artifact for draft and precons significantly outnumber those buying it for full constructed and the prices we see are a natural result of that. Constructed is just too terrible a deal compared to draft.

    (I do not have access to the data that would confirm or deny this theory.)

    • scmccarthy says:

      > It comes with 20 packs

      Whoops: I mean 10 packs. The rest of the sentence is still correct.

    • TheZvi says:

      I rewrote the article substantially to reflect the new information. I may revise further as I think things through more. My apologies for getting it wrong and my thanks for providing the data sources.

      Time of Triumph is a fair card. I checked a few others and it seems the patterns are all similar, and a lot of this is because I bought into the game on the second day in order to get to playing quickly. Which I don’t regret, given my costs of time and such.

      (Score one for getting the right answer on the internet by posting the wrong one, even if it wasn’t intentional.)

      Note that pack e.v. is different from realized pack e.v. when you sell, reasonably dramatically so, so pack e.v. of $1.30 does not mean you get $11.30 off your draft cost. Realistically I think Draft Artifact costs more like $10. But it doesn’t change the overall point much.

      I like the way you think about draft vs. constructed here, but I’d also include Null Artifact. A lot of people, if we go by player numbers, decided to bail out of the game after buying. Right now we have too many people dumping their initial 10 packs worth of cards, either for draft or because they are quitting, plus any free bonus packs and anything else they ended up owning, driving down prices to current levels, and crowding out marginal pack sales.

      While that continues, the economic effects of changing cards won’t matter much, because they’ll be dwarfed by this other effect; players will mostly be buying everything worthwhile or selling everything, so randomly changing what is worthwhile won’t matter much.

      • scmccarthy says:

        Good points! (And yeah I didn’t check what exactly they meant by “pack EV” (whether that was buy or sell prices).)

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