Splinterlands Supply Glut Back to the Forefront
They say you should dress for the job you want but if you want to be a surgeon, walking into your burger flipping job looking like you're ready to get elbow deep in someone's guts may not help you.
Splinterlands has been dressing for the job they want for a while now. With the web 3 notion that you can't tell people what to do but you can poke them relentlessly until they do what you want them to do, Splinterlands has made a game full of glut.
Take a look at this.
There are probably only a little over 1/3 of the 15 million CL packs opened so far. While almost 2/3 have been sold, you know half of those are probably sitting unopened.
There have also been many people who've combined these cards to all different levels.
Still there are 236,704 Hardy Stonefish in circulation.
If you ask the team about it though they will correctly point something out about this card and all the rest:
It takes 400 copies to max out this card. If you assumed all 236,704 of these were level one cards (they aren't), and you divide that by 400, you would have just 591 copies of this card to be split amongst 100k players. In that sense, this card is scarce as hell.
Further, they will tell you that it's their goal to make that happen. But we all know, this isn't possible. The game in which people get and combine all the cards real quick is the game they've been dressing for since Alpha but they never got the job and they never will.
This has been a huge problem in this game up until now. The supply glut is the biggest thing holding this game back. But so far the negative impact has been less than it could have been.
Two super events that increased card availability
The problem got worse when the rental market came out because cards that were just sitting dormant in many whale accounts could now be rented out. The utility of millions of these cards was now unleashed on the market so suddenly fewer cards were needed in the game.
Luckily though the rental market was also a HUGE innovation that, along with the SPS airdrop, brought tons of new player expansion and soaked some of that up.
Right now though we are seeing another event quite similar to the one the rental market brought, but without the expansion of players.
Even though the rental market existed, many huge whale accounts didn't bother putting their cards on the rental market. Maybe their accounts were too big and unwieldy. Maybe they just didn't see its potential. Maybe they understood the damage they would cause to the value of their own cards. I really don't know but I do know they haven't put the utility of their decks on the market and that has helped the market weather the supply issues caused by the team dressing for a job they aren't qualified for.
The event happening now is the emergence of rental bot companies.
For a 10% profit share, a bot will manage your rentals for you if you have the hive power to keep up with it.
How good is the bot? That's a whole other post. Let's just say that if you weren't good at managing your cards, its probably an upgrade but not anywhere close to as good as you may have been hearing. There's some shady stuff going on in the numbers. Unsure if its intentional but there are some problems to be sure.
The biggest of these companies is splex with its Rent Golem.
It could be higher now but a few seasons ago splex was saying their bots run over 30% of the rental market. That was after just a few months of existing.
What the emergence of these bots did was wake up the giants.
Maybe you remember earlier this year when someone opened 250k Chaos Legion packs making them the biggest account in the game in terms of total collection power? I've watched that account and besides a few delegations, those cards has sat unused.
Not anymore. Now 15k of those cards have hit the rental market. It would be more of them except bots are HP heavy and that is about all the accounts 13k hp can take.
But if you're wondering why your rentals just took a hit? There it is.
And it's not just them. To give you an idea of the accounts Splex is now managing, they have 3 levels of volume discounts.
My account is worth a bit over $60k USD. Most of it is optimized for rentals.
According to Splinterlands, accounts over $10k in value are the top .45% of all accounts. I can only guess that mine is top .25%.
My account doesn't come close to qualifying for a volume discount. Not even the first level. My account usually makes 25-30k dec per day. To reach level 1 of their discount tier requires a 14-day daily average of 50k dec. To get the best discount you need 150k dec per day. I'm not actually sure that anyone reaches that.
To be fair, there are ways to add to your average that aren't rental market related like spending a lot of cash on cards using their market place but it's still going to be a huge challenge to get to those levels on the 14-day average they want.
Splex isn't targeting normal accounts although they will take you. They are after the whaliest of whales. They are waking giants and flooding the market with cards that were dormant until recently. This is a super event that no one is really talking about.
A couple weeks ago I put out a post talking about how I'd been consistently renting out untamed summoners for 35 dec each. Now even after almost 2 million rentals, there are still 850 to 1650 of each sitting dormant on the market. And I can tell you, the bots are no longer paying up for using them. You can rent them all day now for a few dec. This is because so many new cards hit the market.
I don't write this to disparage the bot rental companies. I definitely have a few critiques of them that I might decide to write about later but ultimately I welcome their success. They are showing us a truer picture of the game. But I assure you, there are still many accounts sitting on a lot of dormant cards.
I mean, our friends that opened 250k packs have a lot more than 15k cards they could be putting on the market if they wanted to. We are still only seeing a fraction of whats out there.
What I'm writing this for is just to make people aware that this is happening and its going to have a detrimental effect on the game for a while.
The team has been lucky to this point that so much of the inventory they've been able to sell to us has been sidelined but that luck might be running out.
With bots renting out cards, we are getting more and more of them finding their way to the battlefield - or rather, to sitting on the market driving card values and prices lower. And it's just going to keep growing. I think the biggest holdup now is that these bots are still hive power hungry. You need a lot of hive power to keep a large account managed properly. But at these bots find ways to get more efficient, we will see a steady influx of inventory coming in even if the devs didn't release another pack.
It's time to revisit the idea that "well, when you combine all the cards it's not that bad" when they've spent the last 4 years unsuccessfully trying to get people to combine all the cards.
Combining cards gets harder as time goes on
And as each new pack comes, the likelihood that anyone is going to go back tot he old sets and start maxing cards gets lower. This is especially true now that Modern only works with 2 generations of cards. Untamed is a few months away from being banished to Wild only. When that happens, Chaos Legion will be on the downhill slide with its days numbered too.
And remember, the side set gets kicked down the line at the same time the parent set does. That means Rift Watchers only gets about 15 months of circulation before it's deemed too old to be Modern.
If someone plans on playing only Modern going forward, this has to be factored in when deciding which cards to buy and max out.
Gaming guilds and bot farms aren't that different
With the team set on attracting outside gaming guilds as a primary vehicle for growth and the fact that much of the reason for creating a Modern format was to give new guilds a chance to compete, we have to take that to mean that gaming guilds and the thousands of players they bring in will likely be playing mostly Modern.
This is great since there are more Modern cards than anything else but we do have to ask what this means for card sets when they are dropped from Modern. Are Untamed and Dice cards a few months away from a major selloff?
The other thing to ask is will these players be compelled to ever combine cards to max?
A few weeks ago in the townhall, Aggy interviewed a guild owner who was trying to make his way into Splinterlands. He said something interesting that makes a lot of sense:
Gaming Guilds don't buy the top cards. They don't try to come in first place but instead do just enough to be profitable.
Guilds are a lot like bot farms in that way. They need duplicatable strategies using easy to access cards. This likely doesn't mean maxing out a bunch of cards but spreading many lower level cards amongst many accounts.
And this shouldn't be weird.
I can't think of a single thing in life, including these games that doesn't have most participants operating at a mid to lower level. A few people rise to the top but the vast majority will always stay in lower levels in most of what they do. The average will always be well below the top in performance and ownership. This isn't different in Splinterlands and the cost structure of the game basically guarantees it.
It costs thousands of dollars to max out a card series. With each release being seemingly bigger in scope than the previous ones, its not going to get cheaper.
While a card like Hardy Stonefish might now be $0.015, that's just for the cheapest copies. In order to max a card out paying anywhere close to these prices for all 400 cards they would need, a player would have to slowly buy over days or even weeks. As you can see, in this card with 236k copies, there are only 4100 on the market at all.
And next month when Rift Watchers comes out, there will be a sudden shift in energy away from maxing out CL cards and it will be on to maxing the 46 brand new Rift Watchers cards. And before the people who really want to do that can finish the job, it will be onto rebellion.
At that point, it's going to be very rare to find someone who says the words, I'm trying to max out my CL collection. And also at that point, we will probably have 7.5 million CL packs unopened as people rush them to market expecting them to be worth $25 each.
The great bot return
But it's not all bad. In the last townhall, Aggy interviewed another dude who said he ran a bot farm that has been disabled since ranked rewards went into effect. He is planning on coming back but he still hasn't worked out the rental kinks.
This is something I've been saying for months. We lost a lot of bots who need to rent cards to play this game. Not just a few cards but 40-70 cards each. But they are trying to figure out how to come back still and eventually they will figure it out.
We've seen many false starts as a few bot farms turn things back on for a few days and then disappear again. Recently we hit all time records in total rentals at over 3 million in a single day. This was in the middle of last season and it topped every end of season ramp we've ever had.
This season we have dropped back down but at 1.8 million rentals, its still quite high. The problem now is that with all the new inventory on the market, 1.8 million no longer has any impact on sending values up higher. At this point, I think we need about 4 million in order to really see a balance in supply and demand and that's more than we've ever done.
But, all we are waiting for is these bots to turn back on. Once they do that, the fact that there's more inventory on the market might be a positive because otherwise prices may get out of hand.
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