Card Economics 1 - Neon - May, 2018

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Card Economics Part 1: Introduction

Link to "TLDR" video.

While we continue to wait for the slow drip of Artifact-related news, I wanted to start a series focusing on card game economics. This is a topic that I am passionate about, and have written on extensively. Most of my work has focused on comparing the free-to-play (F2P) model of different games, but given that Artifact is working on a different axis, I thought I could take the opportunity to write a deeper and more general take on the subject. What are the advantages and disadvantages of available economic systems? What does it mean given what we know about Artifact’s monetization model? Who does this benefit? There is a lot I want to cover, so I have decided to break this into a series. This is the first part, where we will focus on broad themes within card-economics, as well as define some general terms. Some of the topics covered in future sections will include the pros and cons of various economic models, the impact rotations has on deck costs, and hopefully by the end of the series we will have enough information to crunch numbers related to Artifact. I am writing the series as we go, so if you have questions or suggestions for topics please share them in the Reddit thread! This will help shape future segments.

Before we get into things, I wanted to make a few comments about the economics of card games generally. Why do I care so much about this? Does it really matter beyond how much the game costs? I think the economics of a game is part of the game. When you are playing a digital card game, what makes you think that what happens in your battles is “the game” while what happens in the collection manager is not? Yes, I understand that managing your collection is a different experience than duelling, but what about customizing your team in a JRPG? Would you consider that part of playing the game? Or what about managing your cities in Civilizations? my personal belief is that everything that happens in the client is all part of the game, so therefore should be subject to the same type of scrutiny as what happens in your duels.

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In addition, the economic aspect of the game has a huge impact on how the actual duels play out. For example, “Legendary” in Hearthstone has both an economic meaning (opened very infrequently/costs a lot of craft) and an in-duel rules meaning (can only be played as a 1-of in your deck). The structure of the economy also has massive implications for formats like Arena, where the reward system literally determines if you get to keep playing. This is totally aside from the most obvious point: the cost of your game determines who gets to play! Developers could price their games at 200$ just to get in the door if they wanted, but this will effect both the number and the type of gamer that would sign up. Hopefully I have made my point: the economy of a game is an essentially part of a game’s design, and is therefore worth analyzing. If a game’s economy is good it will contribute to a healthy vibrant community, while a bad economy can spoil other aspects of the game.

With all that in mind, let’s get started!

Structure Versus Cost

It is important to divide up the cost of a card game versus the structure of the economy. Cost is pretty straightforward: how much investment is required to get a competitive deck or collection. The economic structure of a game is the apparatus in which one type of card can be converted into a different type of card. Is it difficult to get the cards you want, or is it relatively easy? I constantly see people confusing these two concepts, or misunderstanding how they fit together, so I think it is worth spending the time to tease them apart.

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Imagine there are two pizza places in town. We are going to call them Mario’s and Luigi’s. Mario’s offers delivery, and are really fast, but it is extremely expensive. Luigi’s does not offer delivery, so it is a pain in the ass to get the pizza, but they are dirt-cheap. Mario’s is expensive but easy, while Luigi’s is cheap but difficult. These two factors – convenience and price – correspond with the concepts of structure and cost. The price of the pizza is obviously the cost of a given game, but the convenience of getting the pizza is reflective of the structure. To show how these are totally separate phenomenon, you can imagine a world in which Mario's pizza both has fast delivery and is cheaper, while Luigi’s is both inconvenient and expensive. Of course you might guess that Luigi wouldn’t stay in business very long, but sometimes pizza places go out of business.

Unlike pizza, analyzing the economy of a card game isn’t straightforward. When talking pizza the question is pretty simple: how quickly can I fill my body with gooey cheese and tomato sauce and how many dollars do I need to shell out? When looking at the economy of a card game there are a lot more moving pieces, and it can sometime be hard to tell how they all fit together. Some of these costs could be difficult to calculate or partially hidden. With that in mind, let’s talk about “structure” and “cost” separately to understand each.

Structure

When I talk about the structure of an economy I am describing the connective tissue that relates the various elements of a game’s collection management system. This is specifically about card game economics, but much of this could be applied more broadly to other games as well. I think there are 3 fundamental questions that the structure of the economy attempts to address:

1) HOW DO I ACQUIRE THE SPECIFIC CARDS THAT I WANT?

Someone recently introduced me to this video by Numberphile on the cost of collecting World Cup stickers. If you don’t feel like watching the video, the short version is that collection building is really expensive because your chances of getting an unnecessary duplicate goes up as your collection expands. This is pretty obvious, but the rate at which the cost increases as the size of the collection expands is pretty insane. It isn’t hard to apply this logic to collection building in a trading card game, and while few people are looking to have a complete collection, everyone has specific cards in mind that they need. In order to actually complete a given deck, you need to have some mechanism to acquire specific cards that you want. Without this, players would either be forced to open tons and tons of packs to get what they need, or be restricted to only building decks out of the cards they opened themselves. You can actually see in the following graph how many packs you would need to open to get all the cards in a given set assuming there was 1 card per pack and the total set size was between 5 and 25 cards.

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2) WHAT DO I DO WITH CARDS THAT I DO NOT WANT?

In the last paragraph I started out by discussing the Numberphile video on the subject of World Cup sticker collecting. They focus on the problem of getting the stickers you don’t have, but what about those stickers where you have extra copies? What if you just don’t like that player, and want something else? Once again, we can translate this into card games. Anyone who has played TCGs for a while has surely cracked their share of packs where the majority of the contents are trash, or at least replicates of stuff you already have. You need some mechanism to turn these unwanted cards into cards you want. This is the second function of the economy. The chart below shows the percent of cards opened that are replicates in a system where the set is 5-25 cards in size and each pack contains 1 card. This mainly applies to someone trying to build a complete collection, but it still shows the challenge where you are very likely to pick up a lot of replicates as your collection expands. Games must offer some mechanism to turn these extras into something else.

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3) HOW SIMPLE IS IT TO NAVIGATE THE SYSTEM?

The two points above focused on specific functions of the economy, but the third point focuses on a more environmental concern. How easy is it to use the system? How much effort is it to get maximum value out of your collection? In “living card games” like Epic, this system is dirt simple, since they give you literally all the cards for one price, so collection management is effortless. In trading based games like Magic the Gathering (and especially Magic the Gathering Online) collection management can be extremely complicated and intimidating for new players. How easy is it to convert one card into another? How many different types of currency can be found in the game? Does the value of your collection stay constant, or does it fluctuate over time? How is rotation implemented? I am going to expand on this later in the series, but there is no question that the complexity of a game’s economy has a substantial impact on a player’s experience. In some respects, this starts to really connect to player preference, which is a subject I touch on below.

Cost

Enough with all this “structure” mumbo-jumbo, let’s talk about something real! Let’s talk costs! The divisions here are extremely simple: money and non-monetary inputs.

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MONEY:

You may not be aware of this, but in modern civilization you can trade different forms of government-issued currency – also known as “money” – in exchange for a variety of goods and services. This may sound like a scam, and I am pretty sure the whole scheme is a bad idea, but here we are (#BringBackBarter). Most traditional games require players to pay a one-time cost, but when it comes to modern card games this is not typically the case. Here are the general categories:

Flat-rate: this is the traditional system for buying games, where you spend money one time, and you get access to a game forever. Not typically used for card games, but applies to “living” card games.

Subscription: players pay a regular fee to have access to the game, letting them play all aspects of the game. This is most common in MMORPGs, but I suppose could be implemented in card games as well.

Irregular/Non-essential: most card games fall into a weird middle zone between “subscription” and “one-time” purchases. On the one hand, you can just buy a handful of cards and play with those forever. On the other hand, if you want to keep up-to-date with the current “standard” format, you will need to continually buy new cards. This has a number of implications. Unlike the flat-rate or subscription-based costs, this irregular system actually gives you control in what you spend! You are not totally bound by some price point set by the game developers, and if you want to be a “budget” player you can do that. On the other hand, you may get beat up by players who invest more in the game. These “non-essential” payment model games are the most likely to fall into the trap of being “pay-to-win”. This overlaps somewhat with the “Game as a service” model, but not entirely. The next segment of this series will delve into this subject more, and specifically talk about the challenges of free-to-play, pay-to-play and pay-to-win games.

Before moving on to talk about free-to-play “payment” methods, there is something I would like to stress: I am not interested in shaming pay-to-play players, or pay-to-play games. Some people will get upset about players that buy up everything “ruining” the free-to-play experience. There is nothing wrong with players who want to just buy a competitive collection on day one is that is available. Similarly, I don’t think there is anything wrong with game developers that want to make money. There are limits to what game companies should do, but if they are honest about their costs and do not use deliberately exploitive tactics when designing their economy, things can only be so bad. Still, I think some games fail this test, and I will be expanding on this in my next piece when I talk about pay-to-win games. I just wanted to make clear that I don’t respect viewpoints like “Valve is so greedy because they are not giving out Artifact for free!!”

NON-MONETARY

Many games offer avenues other than money to advance in the game. I am grouping all of these together as “non-monetary”. It may seem like a cop out to divide inputs into “money” and “not money”, but all of these different possibilities are most easily understood as being grouped together. In reality, the main non-monetary resource people spend to advance their collections is time.

Time – there are a lot of games out there that give you reward for playing. This includes prizing for winning games, completing daily quests, moving up the ladder, or even just participation bonuses. Winning games of Hearthstone gives you a little gold, in addition to completing quests. Eternal gives you a pack when you win your first constructed win of the day, in addition to the quest and game win rewards. Magic the Gathering Arena gives fairly reasonable rewards for the first few wins of the day, though these drop off entirely after the fourth win. You can probably think of a bunch of other games that have other play rewards beyond just card games.

Social – making a good game is only half the battle. Getting people to play your game is the other half. In a world where everything is competing for our attention, developers often turn to players to convince others to play their game. Many games offer some small reward for inviting a friend to play, leave a review, or share the game through social media. Usually these bonuses are small and limited, though some games use friend invites as a major resource. This is probably most pronounced in Facebook games, where players are strongly incentivized to both invite their friends to play the game, and network with them in the game. Some of these tactics can be shady in my opinion, but I don’t think there is anything wrong with giving out a few rewards to people who help spread the game.

Other – if you thought money vs. non-monetary was a cop out, you are probably stoked about the “other” category! There are a wide variety of ways games can reward players that are non-traditional. Some games have tied in-game rewards to Twitch viewership in the form of “Twitch Drops” (particularly Elder Scrolls Legends). Other possibilities include special events, rewarding content creators with extra packs, or global rewards for some promotion/milestone. These are not typically an important aspect of the day-to-day income of the average user, but I think if these are well executed they can greatly enhance the experience of everyone involved in the game.

Subjectivity – Apples Vs. Oranges.

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Before moving on to specifically talk about Artifact, I want to touch on the topic of subjectivity and personal preference. Each individual’s tastes and inclinations are ultimately just as important as all this talk about structure, cost, etc. Let’s go way back to my conversation about Mario and Luigi’s Pizza. What important factor did I NOT talk about? The flavor! Why? It seems influential, right? Well, in some ways it is too important, while also being too difficult to measure. Let’s say Mario’s Pizza just tasted horrible. It could literally be across the street from your house costing 25 cents a slice, and you probably still wouldn’t go there (well, at least most of you). You can come up with similar stories about pizza with heavenly flavor being popular despite being overpriced. While I clearly feel that the economy of card games is extremely important for the overall game experience, we should not forget the gaming part of the game.

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For card games, this means a few things. If the game isn’t fun to play no one is going to play it, and the economy doesn’t matter. There are infinite free browser games and iPhone games that few people play because they suck. Similarly, people will play games that they like, even if the costs are not competitive with the alternatives. I have done some mathematical analysis on both Hearthstone and Magic the Gathering Arena to show that they are overpriced compared to other options. Does that mean everyone who plays these games is being irrational? Nope! They could just like that game more than the competition, and that is fine!

In addition, even talking about the trade-off between different attributed of a game is hard. In the pizza situation, where you land on the balance between delivery convenience and price is going to depend on your schedule and your pocket book (assuming similar flavor). One game might have a horrible return on F2P rewards, but the cost of buying decks for cash is reasonable. An unemployed high schooler looking to kill time is going to be less interested in this set up than a 30-something experienced card gamer with a successful career, but little free time. There are loads of different ways in which every game is ultimately its own unique experience, and it is impossible to compare them in their totality. Card game economies are ultimately tied to card games, and just like I think it is impossible to talk about card games without considering the economy it is also impossible to talk about the economy without considering the game. In this series I will try to peel off the economy from the rest of the game to look at each in isolation, but this has limitations.

Why am I going off about this? Well, in my history writing on the subject of card game economies there are some comments that come up a lot. There are a number of factors about games that are near impossible to properly account for. Let’s take Hearthstone, which is the best known in the genre. I can tell you how much it would cost to buy a specific deck right now, but I don’t know how to calculate the cost of building and maintaining a competitive collection.  Is it enough to have one top tier deck, or should a competitive collection be defined by having access to a variety of competitive decks? If yes, how many? Hearthstone has 3 expansions per year, while Magic has 4, which suggests that Hearthstone is easier to maintain, but that ignores the relative impact of these expansions. Maybe every Hearthstone expansion is extremely impactful, forcing you to buy a bunch of new cards, while Magic only has 2 truly impactful expansions per year. What about Hearthstone’s classic set, which never rotates? How should this be included in the cost of Hearthstone? A new player still needs to craft these cards so they are no different than rotating cards on one level, but a veteran player would not need to continually reinvest to buy these cards. How should I count the effect of rotation? It is possible to play non-standard cards in the “Wild” format, but most players do not take Wild seriously. Should I assume that rotated cards will be dusted, or should I assume that players take these cards to Wild? In all these questions player preference and behavior is extremely important, and there is no way to account for it without making sweeping assumptions. And this is just talking about Hearthstone, if you bring trading into the conversation the questions become infinitely more complicated!

If someone out there wants to write some exhaustive analysis on how to account for each of these questions (and the many more of this type) I will be very happy to read it, but I don’t plan to get that far into the weeds. Still, there are a lot of people who leave angry comments on my economy-related articles saying I am distorting the data because I am ignoring X, Y and Z factor. I would love to include X, Y and Z factor that help your case, just like I would love to bring in factor A, B and C that support the opposite point, but I just can’t always do that! I am not trying to cherry-pick data and calculations to prove some prejudiced hypothesis. I make my best effort to include as many factors as I can, but I have my limits. I just hope that few of you yell at me when I can’t include all the factors you might like. This is not trying to dismiss people who would like more detailed analysis – I would want that too! – this is about pre-empting accusations of bias when I put a lot of effort into doing the best with what I have. I also don't want to get caught up into discussions which ultimately boil down to apples vs. oranges comparisons, as these are are not particularly productive.

How about Artifact?

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This first article in the series is very big-picture, meaning that there is not as much that can be applied to Artifact specifically, though there are still some comments we can make. First off, we know that Artifact will be a trading-based game, with a pay-to-play cost structure. This model is extremely prone to high complexity, but there are also a lot of opportunities to reduce the expense of your cards. I spoke briefly in another piece about the potential challenges of trading based economies, and how the specific implementation of the UI is going to have a big impact on user experience. GabeN specifically talks about the poor implementation of trading-based economies in other games, though he does not elaborate on this point much. I think that the success of Artifact is going to be dependent on both the cost and the structure of game. This may seem like an overstatement, but just imagine a world where you need to constantly navigate through tons of different menus and settings to acquire the cards you want. This will be a major barrier to entry, especially for anyone who is not a hardened card game veteran.

In addition, the economic element of Artifact is going to be one of the hardest to test. We don’t know much about what’s happening in the closed beta, but rumours suggest that there are about 100 people, most of whom are experienced card gamers. While they might be good at testing for bugs and balance, I don’t think they are going to simulate an economy for them. I would guess everyone in the current closed beta is just given a “God” account for the purposes of trying out the in-battle gameplay. That means there may not be much testing on how it feels to manage your collection, trade, or build decks under the current economy/UI for now. I personally have faith that Valve would be the best company possible to implement this well, given their experience with the Steam marketplace but that doesn’t make this easy. The trading in Valve’s other games is focused around cosmetic items, meaning that players who aren’t interested don’t need to engage with the market regularly. If you are familiar with Magic the Gathering Online, it is not that uncommon to interact with the trading system once every day or two. These are not just skins and hats anymore, these are the essential pieces to the game, which makes the experience of interacting with the market more important than other titles.

I am really curious how Valve implements any non-monetary mechanisms for collection building. Artifact is going to be a pay-to-play game, but that doesn’t mean it is impossible for any free-2-play rewards to be part of the game. I’ll talk in the next segment about why these rewards will likely be limited, but that doesn’t mean there will be actual 0 play rewards. I am specifically curious about the “other” category. There are a lot of ways Valve could reward content creators and deckbuilders for their contributions to the community. One particular example I have been thinking about is developing a “deck builder” tag to attach to deck list files. Let’s say I built a deck that ended up being really good and really popular. Every time someone wins a tournament with my deck, maybe I get a little bonus! This has the possibility of amplifying petty discussions about who made what deck first, but if implemented well, it might be a great way to acknowledge the energy some players put into deckbuilding. I will be going into a lot more detail about Valve’s economy in some of the later parts of this series, but for now I would recommend checking out this video, which is a presentation given by Kyle Davis on the subject of Team Fortress 2 and DOTA 2’s economy. It is from 2014, meaning it is slightly out of date, but it is certainly still relevant.

Next Steps

I have a lot of ideas on what this series could look like, and am super excited to dig into the different subjects at hand. I think card game economics are fascinating. Still, this series isn’t just for me. It is for you! What topics do you want me to write about? Share your feedback in the Reddit thread, and it could make a difference in where this series goes in the future. My next pieces will be on the different types of card game economies, and the pros and cons of each. I also hope to do a pieces on the history and philosophy of Valve’s economies, the impact of rotations and balance changes, as well as giving a “state of the art” look at what other card games generally cost now-a-days. If there are themes within any of these topics that you want me to discuss, or something entirely separate, I really want to know! Also, if you have any materials or links you think might be useful to me, I want to see them! Maybe GabeN gave some interview about DOTA 2 economics on some obscure website that I haven’t seen. I have been working hard researching for this series, but it isn’t easy to find everything.

THANKS SO MUCH FOR READING! I hope you all like this series, because this is going to be quite the project. Please remember to share this article in all the different social places so people can learn about it! Also, be sure to check out my other articles, and my videos if you haven’t already. This article has a “TLDR” Youtube video associated with it, which summarizes the major points of what I said here in as little time as possible, and I plan to make TLDR videos for each segment in this series. I am aiming to release new articles in this series every other week (assuming no major news releases), and will probably be at least 5 or 6 parts. Thanks again for stopping by, and I look forward to see you all again soon!!!

Neon