Steam Trading Card Economy

[Kairaphi]

I'm no economic expert and I won't pretend to be. Due to this, I have a few questions for any and all of the good people of the steam community. Mainly, do you believe that the low prices of cards will slowly begin to rise after the sale? It seems the prices dropped the minute the sale began so perhaps the end of the sale will bring forth a more stable card economy. If so, is it worth it to stock up on cards now as they are cheap (do you believe they have the potential to drop any further?) Lastly, do you believe cards whose production will eventually cease to exist (i.e. the summer getaway cards) will be worth anything in the future and if so, how long would it take? I'm mostly asking for people's predictions and oppinions considering the fact that this isn't a concrete and fully objective topic. Thanks in advance :P

P.s.: Anyone else as excited for these trading cards as I am? I'm a huge collecting geek so I'll have fun both collecting and playing with the economy of these cards :P

~Kairaphi

[Sedge]

No, they won't be worth anything, as they have nothing of value backing them.

Steam experience yields nothing, so there's no incentive for the community to actually care. If there were some nice benefits, then the value would rise.

It's just virtual garbage - but if you're a pokemon guy, go collect em all.

[Sickb0y]

If you expect to get rich off the summer trading cards in a few months from now you can forget it. As for the trading cards I really don't care for them neat idea, doesn't really change how i use Steam etc.

[Grim_Pulse.TTV]

I've managed to scrape up $4 selling them.

[Kairaphi]

Originally posted by Sedge:

No, they won't be worth anything, as they have nothing of value backing them.

Steam experience yields nothing, so there's no incentive for the community to actually care. If there were some nice benefits, then the value would rise.

It's just virtual garbage - but if you're a pokemon guy, go collect em all.

That's your own oppinion. I do disagree with your comment on no value however. Following the subjective value theory, value is nothing more than a fabricated and created essence that latches onto an object or entity (as is does with paper and metal in the form of money; or in this case, virtual trading cards). The incentive of collection, achievement, and representation yield strong results towards subjective value; giving these cards great potential value (as it does with pokemon cards to quote your example).

[TimeViewer]

I never got into any of the card collecting games, bit after my time, but I am having fun with these, altho I do have to laugh at the prices some people are posting for cards... $400 for steam sale cards, and other absurdities, some of these people are acting like they have a first edition comic book lol.

On a side note I have noticed that sometimes cards come very very slowly or even not at all, I've noted about 4 times or more that I've gotten no card (and yes the purchases added up to $10 etc and said I was going to earn x number of cards)

As far as what we earn it's just backgrounds for profiles and a few emotes, since it's just fluff why not add some skins for steam?

[Starts@0]

I suspect that there will be a price hike on the getaway cards after the sale. Albeit, for only a few days since that's all the completionists and collectors amongst us needed to craft a level 5 Steam Summer Getaway Badge. Don't expect to make back half or all the money that you've spent on the sale though. Maybe just a dollar or two, which is better than no dollar at all.

[VH8]

@Sedge - that's just not true. The sheer fact that there are people buying these cards, that people want to collect them and there IS an active market for them, proves that for some people they're valuable. Value is based on demand, so as long as there is demand, there is value.

I mean - people pay for services, right? Service is not a physical object and yet has value. This can be, for example, a ride on a rollercoaster - you get absolutely no physical items from that, you just pay for the experience, how it makes you feel for a short time so does it have value - yes. That said, now there's a market for "virtual goods" which have value for people who want to "have" them and "have" doesn't always mean "touch" (or even own), it can mean "experience".

@Kairaphi - as mentioned earlier, if you think you get rich with these cards - forget it, won't happen. However, the prices will indeed go up, but at some point will no longer rise. The reason is this - after the sale ends, there will be a group of people who will want to level up their badges to the max which means, they will need 50 cards (5 sets of 10) to do so and since no new cards of this type will be generated and existing ones will be "trashed" (by crafting badges), people who sell them will realize that they have something that can no longer be obtained easily and will increase the price.

However, at some point, all people who wanted to level up their badges, will already have them and new community members won't be bothered doing so because this would mean getting a collection from start-up, while the previos group would consist of people who already started their collection so they're just "missing something" and they will more likely buy the missing part than those that never got engaged in this set in the first place.

So long story short - I predict a graduate increase in price as they will become more rare, followed by some time where thwy will last at this price point and then a decline as the sellers will notice that the demand goes down.

Of course, there's always the exception from the rule and in this case it would mean - one person addicted to collecting virtual goods will want the entire set so bad, that he will pay ANY price to get it and someone who puts it up for sale at a ridiculous price may get lucky, but of course this is rare, but possible. I read that Zynga apparently cashes in on a very minor percentage of people who spend ridiculous money on virtual goods andnot on people who maybe pay a buck and that's it. Of course, this is not a good business practice as it exploits people's potential to addiction, but just sayin'.

[Kairaphi]

Originally posted by VarHyid:

@Sedge - that's just not true. The sheer fact that there are people buying these cards, that people want to collect them and there IS an active market for them, proves that for some people they're valuable. Value is based on demand, so as long as there is demand, there is value.

I mean - people pay for services, right? Service is not a physical object and yet has value. This can be, for example, a ride on a rollercoaster - you get absolutely no physical items from that, you just pay for the experience, how it makes you feel for a short time so does it have value - yes. That said, now there's a market for "virtual goods" which have value for people who want to "have" them and "have" doesn't always mean "touch" (or even own), it can mean "experience".

@Kairaphi - as mentioned earlier, if you think you get rich with these cards - forget it, won't happen. However, the prices will indeed go up, but at some point will no longer rise. The reason is this - after the sale ends, there will be a group of people who will want to level up their badges to the max which means, they will need 50 cards (5 sets of 10) to do so and since no new cards of this type will be generated and existing ones will be "trashed" (by crafting badges), people who sell them will realize that they have something that can no longer be obtained easily and will increase the price.

However, at some point, all people who wanted to level up their badges, will already have them and new community members won't be bothered doing so because this would mean getting a collection from start-up, while the previos group would consist of people who already started their collection so they're just "missing something" and they will more likely buy the missing part than those that never got engaged in this set in the first place.

So long story short - I predict a graduate increase in price as they will become more rare, followed by some time where thwy will last at this price point and then a decline as the sellers will notice that the demand goes down.

Of course, there's always the exception from the rule and in this case it would mean - one person addicted to collecting virtual goods will want the entire set so bad, that he will pay ANY price to get it and someone who puts it up for sale at a ridiculous price may get lucky, but of course this is rare, but possible. I read that Zynga apparently cashes in on a very minor percentage of people who spend ridiculous money on virtual goods andnot on people who maybe pay a buck and that's it. Of course, this is not a good business practice as it exploits people's potential to addiction, but just sayin'.

Good points. As I have said, I do not plan on becoming rich; I simply want to play around with the economy. On the flipside, if the prices return to what they were before the sale (i.e. $2.00 each) then one could make a decent amount of money and pay for a good amount of games with these cards. To respond to your "lack of incentive after badges are created" argument, there is one aspect we have yet to consider. Whilst a majority of these cards have the potential to be infinite (more people keep buying more games hence generating more cards), the more likely outcome will be what you said; people will craft badges hence destroying cards and the only market left will be the collector market (along with less cards due to badge conversion). In turn, this may end in the occurance of a collector-run market with a limited amount of circulating cards; hence profit.

It should also be noted that valve has set a limit on card trades on a "per year" basis; proving valve also sees the potential in creating significant proffits (significant enough to pick up a few games) hence wants to limit the exercise.

[VH8]

Just to clarify - I was mainly talking about the Summer Sale cards because they are limited. As in - only available during the sale and at some point no more will be generated.

That said, I predict 2 behaviors:

1. For Summer Sale and other "limited time" cards - they will get the biggest price gain (comparing to their lowest points during the season) because of the limited availability, but at the same time, this limitation will make them less attractive after some time for the general market in which case, as you've pointed out, the "collector's market" will be the only one left which can be very good if everyone else gets rid of their cards, if there will always be hundreds of them available - not so much, but I doubt that so I am actually going to keep the dupes I've got :)

2. For "regular cards" (not limited) - they have a bit different mechanics, everybody who buys one "copy" (license) of a game, gets basically a free portion of the set. Now, to get the rest, he must either buy them from the market or wait for a booster pack drop, but a booster pack drops only when someone crafts a badge from their set. Which means that unlike the "seasonal" cards, the quantity will be kept at a steady level as for cards that get "destroyed", further cards get added to the circulation.

To me, the second situation is more interesting as it's more similar to the "natural" market that we have in the world - people create good, get rewards for it, spend the rewards for other goods. Goods get consumed, new ones are made, traded, consumed... etc. there's a more or less steady circulation. If there wasn't, we get either inflation or deflation. The card market is of course more specific because the "goods" are just attractive to certain people, it's not something that everyone really needs, but still - for those involved, demand and supply will exist and since Valve made it work so smartly, I think that this will make the market "stable", that is - there may not be a lot of inflation or deflation.

That said, if demand and supply are steady, the price changes should theoretically not be too steep, you may see some variations, but in general, the "regular" cards are not something you can buy off and sell and make a significant profit. However, there's one factor woth considering - the amount of "players" in the market will rise so I think that even though the "mechanics" of this market are steady and solid and supply is being "shoved" appropriately, the fact that more people will engage in it may slightly and slowly increase the price over time.

Why? Well, keep in mind that a trading card is not particularily a consumer good. That is - it's not the end-product. It can be treated as a resource for the creation of the "true" end product which is a badge. Badges also have their value, that is - status. You can show them off, they increase your status by increasing your level so there's a dillema - will I keep my cards and collect sets, or will I craft badges and increase my status? The interesting thing is that you can do both - level up a badge to the max and then still want to have a full set. This will actually increase the supply because as much as it's easy to get just one set once, it's more difficult to get a max. level badge and then still have a set which makes a card more valuable just because of its role as a resource, more than a good.

Phew ;) So to sum-up, my predictions are:
- Limited-time cards = very cheap at fist, but big price jump later, then maybe a slow decline with the occasional "rarity" buy for way too much money.
- Regular cards = steady price at all times, but with slow increase as the market grows.

[Kairaphi]

Returning to the question of what will occur directly after the summer sale, in addition to more people entering the market over time (as VarHyid has stated would occur), card circulation will drastically decrease (or so I predict). This is becasue the summer sale (which offers absurdly low prices for games) is a means for more people to retrieve more cards. Once the summer getaway event ends, sales will return to normal (if not decrease due to wanted games already being bought by people who wanted them); hence creating less cards for more people. Of course, once supply decreases and demand increases, prices ought to rise.

I am personally hoping for this to occur so that the card system stays alive. Since Valve states that this is an experiment, I'm worried that once people lose interest in the cards due to potentially low market prices and sheer quantity Valve will disband this operation. As previously stated, I really enjoy this trading card idea and hope it will last.

[VH8]

One more thing I forgot to mention that may have great impact on the market and by that I mean - something that can motivate Valve to keep this alive and motivate people to continue to engage and that is - new "series" of cards and more badge levels.

See how every single card whether it's from a summer sale or games, has "Series 1" in its name. Why would anyone put this there if there were no plans to introduce Series 2 and 3... no, wait, it's Valve, they can't count to 3 so let's just stick with 2

I think if (or when) they release a new series of cards for a certain game, it would be wise of them to actually discountinue the first series. So everyone who has a game, would again get the free 3-5 drops and then teh rest can be bought, or you can wait for a booster, you know the drill, but the first series will then certainly become rare and think of collectors who would simply want to have ALL cards for their games - they will pay more for cards that cannot be obtained normally anymore other than through the market.

That said, Valve has the tools to keep this alove for a long time as they can introduce low-priced cards by making a new "active" series and at the same time create markets for high-priced cards by discountinuing a series.

I even think that the crucial part of the experiment that Valve want to run is right now - the Summer Sale cards because they will be the first that get naturally discontinued. They will see how if affects prices and engagement and if it will rise the price - they will continue it on full-scale and do multiple series etc. If not, then they may not want to continue it.

Unlike you, I think that the rise of a price of a certain card or card set makes it most liekly for Valve to continue supporting this because from each purchase they get get their share. Of course, if more people generate lower commision, it's the same as few people generating higher commision, so of course in the end it will come down to just how much people are interested in it and I think that if prices go up for discontinued cards, it will mean that there will be 2 markets - the cheap one for active cards, and the expensive one for discontinued and this way it will be attractive not only to collectors, but also people who will want to use this market to gain some money for new games.

In fact, I think I even have proof that this is what's going to happen because... it already does - with "foil" card series. There are already more rare and last time I've checked, the differences between a regular and a foil card of the same series was, I think $0.20 for regular and $0.50 for foil or something like this, but you can already see that rarity does play a role here which only proves that the market is "healthy".

[VH8]

Oh and one more thing - the reason why higher prices are needed is that many people will not want to engage in cards at all... unless they realize that they can sell them for a price that will make it worthwhile to engage. Meaning - with every game they buy, they get cards like "payback" points which they can exchange for something and the more they worth, the more likely someone will try to sell them.

Short - the higher the prices, the bigger the incentive for teh seller. The lower the prices, teh bigger the incentive for the buyer so both are important because if one side will become dominant, the market may crash.

[Kairaphi]

Just to be clear, I never stated that higher prices are a negative contribution to the program. I directly supported it in my previous statement (perhaps you misread or misunderstood what I was saying). And you're right that discontinuing series would create rarer cards hence higher prices. That is precisely the type of action that will keep these cards valuable to the collector; hence keeping the system alive. I really hope they choose to discontinue sets as opposed to keep them around for the entirety of a game's lifespan.

[VH8]

Oh, yeah, sorry. I re-read your previous post, indeed I misunderstood it slightly.

Anyway, I fully agree that it would be great if this system would stay for good. It's a really fun addition to have and the fact that you can actually make a buck or two off of it and then have your next game cheaper because of that is really cool and so far, I think there's really no reason why this shouldn't work considering that this "extra money" doesn't really come from Valve, but from other people so Valve can only benefit on this.

Let's hope they benefit enough to keep it :)

[His Imperial Bodgeness]

I'm no expert, but despite all your flawless economic theory, you forget one thing: market failure caused by consumer apathy. people don't care enough to do that in most cases.While there will be an educated few, most probably will just dump the cards on the cheap or craft and the effect on the market will be negligible; maybe a price rise of a few pence?

I also think this is a fun gimmick which earns me a few pounds, and discontinuation of series is a good idea. So mainstream of me...

As for the idea of regular cards rising as the market increases... I'm not sure that will happen. Think about it: more people will join and buy more games, thus contributing more cards to general circulation. Also, sellers like me try to undercut the market by 1 pence to make a sale immediately, and there are a few like me who will always do that, keeping prices low... sorry everyone! This will counterract increasing demand.

I'm really enjoying this debate!!! Let's discuss this some more, the topic needs recognition.