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Chlodio

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Several realms during the period choose to not vassalize neighboring realms but to insert their hegemony. CK2 depicts this with various tributaries, but I never felt like tributaries were worth the effort. I mean, even with the permanent tributaries, I find it more rewarding to conquer a province, because every province is a step towards forming a real kingdom, but keeping everybody as tributaries does nothing.
I think the game needs to give a reason why a Mercian player would choose to keep the other Anglo-Saxon kingdoms as tributaries instead of vassalizing them. Perhaps, if you keep your tributaries stable long enough (+50 years or so), they'll automatically become your vassals.
 
I think there should be more tributary contracts types with different condisions and benefits. Also i think there should be Conferacy goverment type to represent austria ruling system
 
It took me some time to realize the potential of tributaries. Basically, you can make an entire "state" a tributary, and it will give you money and troops. That's way more efficient than just conquering a province on the short term. Tributary states may declare wars to free themselves from control, but they are also much more stable than unhappy big vassals. If you're playing nomads it's often better to have tributaries than to vassalize. If I remember correctly, the tributary system was introduced precisely for nomad realms so they could use that instead of just vassalizing/conquering.

So in CK2 it depends heavily on the situation. In CK3 you don't have nomads to begin with, and we still don't know how exactly the vassal contract is represented, and how it affects tributaries. Imo it depends a lot on how "customizable" liege-vassal relationships are.