The Winding Path of Splinterlands
We don't always get it right the first time.
In the case of what Splinterlands is doing right now, I certainly got a few things wrong in all my recent bullishness.
I don't think I was wrong to be bullish. But the path we are going to take to get to greener pastures is not the one I expected.
Here's a chart of the daily active users for the last 6 months.
Look at that fall off! Thats 2/3rd of the daily active users just gone.
If you rent out cards for income, you are feeling that loss right now.
The USD value of the rental market is lower than it's ever been.
In fact, earlier in the year before bots started renting crazy amounts of CP, I pointed out many times that there were so many more cards on the rental market than those needed that card owners would just keep dropping the price indefinitely. When we were still over $10k USD per day I said it would drop at a steady rate and mid year we'd be down to just $2-3000 per day.
Well we hit $2100 two days ago with the bots out of the picture. It's as if they never existed and never saved us from collapse. We are right where I expected we'd be and that's a little scary since in that scenario, zero comes shortly after.
Is that where we are now though?
While the math worked out pretty well to predict this. The scenario now is not quite what it was then. Now, we actually have a lot of hope. Let's look at it.
What's going on with the bots?
I know many of you want the bots gone. I don't love bots myself but I've always said the game and game economy has already been built around them so you can't get rid of them. I used to be on the side of no new bots. I still believe that is a viable path forward but it would take much longer to get to growth without new bots. A bot owner can double the accounts they run a lot easier than the game can attract real players. Especially real players who spend money and stick around. Most people are tire kickers. And in crypto most tire kickers demand instant riches and a "fairness" that somehow only applies to them and no one else.
The path the devs seem to be taking is the same one they had last summer where daily active users skyrocket, sending assets prices up with it, and 95% of those new accounts are bots. With this approach they are free to print and sell as many packs as they want as long as they can incentivize the bots to rent and the people to buy.
Just like last summer, most people came running in because asset prices were spiking and they saw riches. They didn't know or care that most of the growth came from bots. And if you doubt that's true, you can see from the chart it is. Probably more than 2/3s of the players in Splinterlands are bots and it's never going to be different.
Except for right now that is. For this brief moment, the bots are a much smaller percentage of the players. There's still probably more bots than players but the ones involved now are either ghosts that haven't been shut down by their neglectful owners or they are more advanced bots that has figured out the system.
I spent several hours the other day speaking to a dude who owns about 300 bots. It was very illuminating and it showed me where I was wrong about my assessment that bots would just rent more to win more.
I was only looking at the economics of the situation. But right now the technical limitations are the problem.
There are several major services that run those bots for people. These are basic bots without a lot of functionality. Some have basic renting functions but it's not targeted. Likewise, even if a bot account manually rents their cards, when it comes time to play the game, the bot uses a database to find the best cards to use for that situation. You can't decide what it plays so it may not even use the cards you rent for it.
So now the only way to ensure the bot does what you want it to do is to go buy your full set of CL and maybe even untamed cards. Unfortunately that just doesn't scale for a lot of people. So their options are to keep paying for a service to run their bot at a loss, or just shut down. THey've chosen to shut down.
The good and the bad of 200k bot accounts shutting down all at once?
Well, first the bad.
When you expected 200k accounts would suddenly start renting, its quite a blow to just lose them instead.
Many of those accounts were renting a lot of CP already too so the loss is very palpable.
The growth we expected now requires adding back in 200k accounts which is now almost twice the current accounts we have active. So just to get back to where we were we need to add back in almost 200% and we haven't grown in 8 months so that seems a tad tricky to suddenly do that.
Finally, the time while the rental market is in the toilet is a time when many card owners re starting to get itchy sell fingers. This is especially true when many higher up players are not getting the rewards they expected to get. I've never seen the mavericks complain as much as I'm hearing it now.
So what's the good parts?
Well, its true that MOST of the bot accounts that we just lost we actually not contributing anything at all to the economy. They weren't buying or renting. They paid the bot hosting service $0.50 per season and the bot just farmed whatever it could. Anything above $0.50 was profit.
Now those players weren't getting a lot. Basically they were getting a maximum of 14 chests per season and those were trash chests. No DEC, not enough credits to buy anything, and only 10% of their chests had a card. With well over 100k accounts, that's millions of chests and they are bound to get something our of that many chests, right?
These bots were taking up server resources, draining the game, adding nothing, and adding to the supply of cards. So while those bots best case scenario is that they would have begun to rent cards, the next best thing for the game is that they get eliminated if they aren't going to be able to do that. At least the ones that didn't rent CP.
The next bit of good news is that some bots are more advanced than others. Many of the people who code their own bots have built solutions for using the rental market. They aren't the most efficient but they are close. It sounds like Splinterlands and peakmonsters needs to meet them halfway on a few things but there is evidence that they are still trying.
With that said, there are a lot of old bot accounts out there that bought spellbooks and aren't operational anymore and those accounts are now going up for sale in bulk for $2-3 per account instead of $10. This means that while the more advanced bot owners may need to work out the kinks and beef up their infrastructure first, when they are ready, the chance for quick expansion exists.
If they can ramp everything up before cards start to collapse in price due to a dead rental market and less rewarding rewards than people expected at the higher levels, it would grow back without all the parasite accounts at the bottom. Of course this is just a long windy path to get to what I thought we were going to wake up to a few days into this new season of those accounts just starting to rent which would have made them no more parasitic than the bot accounts that might buy them and rent.
Last night, I was playing and I notices many of my cards were renting out to bots. It was easy to tell they were bots because it looked like this:
thats about 20 listings rented by a bunch of accounts with random letters for names rented out at the exact same second as each other. ALl at one I had several of these. Then I went and looked and saw that many gold foil summoners were renting suddenly for over 100 dec. In fact, lots of cards were spiking to levels they haven't been to in a while. Today I'm renting out level 1 krons for 70 dec. Back in the early days of the rental market I could get 500 dec for a Kron but today you're lucky to get 15. So a sudden spike to 70 is notable.
WHile this was going on I played 10 games in a row in Silver II that were all surrenders. These are failed bots trying to to work it all out. Then I began getting real games consistently. They weren't any good and I was still facing mostly starter cards even when I got to silver 1 but they were playing again and the few times I lost and could see what they were playing with, I'd notice there was mostly just one card that was rented and the rest were starters. Some of these accounts ECR was down to single digits.
I played one accounts that had all new cards, all level 1, no golds or anything to get a bonus, only 8% ECR left, and the account got 60 focus points in silver 1 for beating me. I'm not sure if that's basically this bot was going to get more than it ever had before by renting or owning one cheap card and playing the account into the ground with the rest of the deck being starter cards.
Is this the new normal? Rent one card instead of none and try to match or slightly improve on the rewards you got before the rewards change? Could be! I doubt it though. I think these bot owners are going to have to keep calculating what makes them the most money as the market evolves. Hopefully its when they are renting every card but it certainly could be renting just one card.
What's it all mean?
Well it means Splinterlands is in a little bit of trouble but its trouble they could find their way out of if they work with the bot owners to bridge the tech gap between the two sides.
One thing is for sure, they need these bots to be playing and renting. There are just millions of cards too many out there for the bots to not be here and there's only more cards coming. Even though bots pull out more than they put in to the economy their major value is that they give the assets that already exist a purpose to exist and hopefully put a strain on supply that increases the value of all assets.
That supply strain on assets creates more value in the assets than the bots can drain. Without the bots, there's no purpose for most for the assets in the game since they've been released around the existence of the bots. Without a reason for the assets to exist, the value plummets very quickly and the game dies a quick death.
So, the quicker the bot owners figure this out and get to filling in the gap and renting cards, the faster we get to the ramp I was expecting and all asset holders want. But if they don't figure it out in time, the selling cascade that could be coming could be deadly to the game.
OK, so let's talk about the rewards real quick since everyone is talking about it and everyone seems to be saying the same thing. The rewards are bumming out a lot of people because they were promise millions of chests and they aren't getting them.
Its fine in bronze and silver because you only 1 or 2 chests anyway. But in the higher leagues that got many more daily chests already, they are getting fewer chests in many cases now.
I have my theories on why that is and I'll demonstrate it with my own account.
So I stopped playing for the most part a few months ago. I play a few games a season. So I started this season in bronze. So I am getting bronze chests.
Now I have decent cards and since there was no rental market for a few days, I pulled out some goodies that would usually be considered rental inventory. On my first game in bronze III I got 5 focus points. The first daily chest in bronze comes at 300 points.
THis was going to take a while. But as I won more and more, the FP numbers went way up. I played for about an hour or so before my ECR dropped below 70%. I ended the day with 16 chests and 28 Season chests. I also moved into silver 3 by the end of the run.
The next day I played one game and immediately got enough FP for 5 chests. Then I kept playing for about 40 minutes and stopped again at 16 chests. Yesterday I played about 2 hours and ended up at 29 chests. I could have oved to gold 3 but I decided to hand back. I'm still getting bronze chests after all and I'm winning in silver. By the end of day 3 I was getting 10-11k focus points per win.
Today I've only played one game. I won it and it game me 11 chests. I'm also already up to 82 season chests.
At the end of last season, most players got all excited and they pushed to get as many chests as possible to end the season. THey wanted those new rewards so they pushed as high as they could possibly go. Now they are stuck at max difficulty. They need a high win rate in a place they shouldn't be and its taking a ton of games to get any points.
WHile the devs stresed that this move was supposed to encourage people to move up, the caveat people didn't listen to was that you should only move up to a place where you can get a high win rate and for many people that might mean playing down.
So, if these players want to win anything this season, they should be renting up to the point where they can make short work of others where they are and then not move up when they are given the opportunity. Some of you have probably already moved up again and might be screwed next season. Especially if rental prices go back up like they tried to last night.
When rental prices start to move, I think we are going to see prices that would make most of us whoa re used to todays prices become a little ill. But the good thing is, the higher they go, the higher the value of the rewards. And ultimately the increase will work in the players favor.
Remember, you'd rather rent $20 worth of cards per day to make $25 in revenue than rent those same cards for $0.20 cents and make $0.50 cents in revenue. That's what will happen as the rates in the rental market go up. Plus the cards you already own will be going up by the day as well as the DEC, the validators, the SPS, and the vouchers. You know, instead of down constantly like its been since the rental market has been collapsing for 8 months.
So remember that when rental prices are heading up and you want to start complaining or saying the little guy needs cheap rental prices. We did that. Its disastrous for the game and your asset prices and the player base growth. Higher rental prices= a larger economy = more income from participating in it = more player growth.
BTW, want to see what 29 bronze chests looks like?
Probably not worth all the hours of my time I spent playing but it was fun playing with my whole deck so I won't complain too much.
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