Time crystals need a MAJOR rebalance. As it is, time crystals can be the difference between first place on the leaderboards and some random, much smaller high score. Here are some suggestions, along with reasons for them. I think the most important ones are #1, #2, #5, and #6. Note that statements in bold indicate a suggestion's overall idea.

Suggestion #1 (Primary/Necessary)
Time crystals should never reappear in the Shadier Merchant's shop after one has already been obtained/used during the run.
It's unbalanced and allows players to reset more than once. This basically makes it advantageous to avoid equipping the time crystal treat because you can get more resets and a better score without the treat.

Suggestion #2 (Secondary)
Currently, a time crystal resets the game's memory of just about everything, including damage. This means that if you know you won't S-rank a floor, you can intentionally die and restart the floor. What's worse is that you can play an entire floor and intentionally die at the end to S-rank the floor the second time. The 2nd time, you will have foresight as to what to expect in every room, which completely defeats the purpose of Arcade mode and certainly belittles the challenge of S-ranking. Due to the nature of Problem #1, this exploit was used twice to achieve the current 1st Place Score in 1P (Gun-D4m's floor and Mimic's floor). The game should remember the damage taken after a time crystal resets a floor.

Suggestion #3 (Secondary)
When the player uses a time crystal obtained from the shadier merchant, it should decrease the score percentage by 15-20% on the floor where the crystal was used (and only there)
. This penalizes anyone trying to get a one-up on others by resetting the floor.

Suggestion #4 (Tertiary/Minimal)
Due the nature of #1 and #2, perhaps players should be banned from getting x2 S-rank trophies in areas where the time crystal is used
. It has a very strong impact on one's ability to get trophies, especially since you obtain omniscience on a floor (at least up to the place where you died). This suggestion is much less important, but I figured I'd put it out there.

Suggestion #5 (Secondary | Credit Em0/Pydoyks)
Prevent time crystals from spawning when the player has applied 3 curses
. This helps alleviate some of the cheesing. The lowest possible percentage with 3 curses active is 160%. Since no curse has percentage smaller than 20%, then most players will be forced play with 140% or less if they want a time crystal.

Suggestion #6 (Derivative of #5)
It should be noted that a cheesy, 165% player can easily overthrow a 180% run. It's likely that 160% can do the same. And a 160% run is possible by employing hardmode in conjunction with elites or x2 damage. So I think Suggestion #5 by itself is too weak. In addition to Suggestion #5, prevent time crystals from spawning when the player has a 150% score multiplier or higher. This means that players can't attempt to exploit the time crystal by pushing the upper bounds of the "Banned from 3 curses run" condition. This way, if 2 of any of the hardest curses (hard mode, elites, x2 damage) are used, the player is banned from encountering time crystals. I think this is much more fair to competitive players (and it creates an equal playing field for them all as well).

Summary
There are several suggestions out there. But I think they weigh differently. Here's my view of the hierarchy.
  1. Necessary Fixes
    • Suggestion #1 is absolutely necessary. Players should not be able to use time crystals more than once for the aforementioned reasons. It's too unbalanced.
    • I believe that Suggestion #2 is also necessary. If I block all damage taken with barrier, I get a potion on the next floor. However, my score still pays the price. For some reason, the time crystal is not currently punished. If I take B-rank damage on a first attempt, but A-S rank damage on a second attempt with my omniscience post-reset, then my new score does not appropriately reflect my actual skill. A skilled or cheesy player could certainly reset a floor to guarantee a potion on the next floor as well. Not balanced.
  2. Extremely Useful Fixes
    • I wouldn't call it a necessity, but I'd very much argue that Suggestions #5 and #6 should be implemented. Competitive players are the main ones concerned with the time crystal anyway. Guaranteeing that people can't cheese their way to 1st place by barring time crystal usage from anyone with a multiplier of 150% or higher solves a lot of problems. It also reinforces the idea that players should rely on their skill, not their luck.
    • I think Suggestion #3 still has its uses. To me, it's not as important as #5 and #6. However, focusing only on #5 and #6 benefits only competitive players. By itself, it overlooks players who are somewhat competitive, but not to the degree of 165-180%. For instance, if a player is trying to make it higher (not to the top, but higher) on the leaderboards with a 150% run, then a person who finds a time crystal with a 135% run can easily outrank them. AND such a player can have treats at their disposal. Punishments need to be in place for using a time crystal. However, if #1, #2, #5, and #6 are implemented, I don't think #3 is "necessary" (still good and useful though).
  3. Less Important Fixes
    • I think the x2 S-trophy balance mentioned in Suggestion #4 makes things more fair. But it's not as important as the other suggestions and will likely leave people salty.
 
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KoBeWi

Jumpkin
Suggestion #1 is absolutely necessary. Players should not be able to use time crystals more than once for the aforementioned reasons. It's too unbalanced.
I'd rather just penalize players for subsequent resets. Something like #3, but happens when you reset 2 or more times. Might affect rest of the run too.
 
I'd rather just penalize players for subsequent resets. Something like #3, but happens when you reset 2 or more times. Might affect rest of the run too.

If it's just going to be penalties, then all resets need to be penalized. You'd be surprised how strong time crystals are for skilled and cheesy players in arcade mode.

I still stand behind only 1 reset though. I'm sure that's why you can't find a time crystal when the treat is active.

EDIT (addition): The basic premise is that the player's highscore should be based on skill. The time crystal allows unskilled players to very easily overtake the score boards if they're lucky. As I said, the current 1st place score used the time crystal twice. And the score is far beyond everyone else. One reset alone can can strongly impact the high score and the run. This is even more of a problem if we're talking about skilled players using time crystals.

I believe #3 is a weak solution to the problem by itself, especially if people are allowed to reset multiple times. If a decent (or cheesy) player resets once in a 180% run, there's a high probability of them completing the run without needing another. Your proposition would thus allow for a noticeable imbalance in highscore potential. Should the player find a second time crystal, most of the run will be composed of a 180% score anyway. The score decrease starting at the second reset would be much less effective. Thus, they will still have a much greater advantage than...say...a 165% player. (165% can compete with 180% if done well)

#1 and #2 are absolutely necessary for score balancing. It doesn't seem that resetting multiple times was something intended for the game. But even if it was, it shouldn't stay. If someone is bad enough to die 2-3 times in a single run, they don't belong on the leaderboards. And if someone is crafty enough to intentionally reset a run to change an A score into an S score with the help of their "floor-omniscience", they definitely don't belong on the leader boards. #5 and #6 strengthen the actual balancing capabilities of #1 and #2. I'd be in agreement to adding #3 into the mix. But I feel like some might find #3 to be overkill if #1, #2, #5, and #6 are implemented, as they should be.
 
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