Valuable Feedback

In what was supposed to be a little throw-away philosophical post, What is the Value? turned out to be one of my most commented posts in quite a while, including some community heavyweights like Gevlon and Jester.

I think there was some real value (pun intended!) in some of the comments so I figured I'd repost them here and add my replies or comments.

First off we have Vince Snetterton:

Anyone who gets into cap manufacturing and sells their product to market prices once the ship is completed is a mineral speculator. It is all well and good when prices of minerals are climbing, but not so much fun when prices are dropping.

I don't think I necessarily agree with that. I think he's saying that since the changing price of minerals raises the prices of everything on market (for the most part), if you buy minerals at a high price and sell when they are dropping the lower ship price as the market depresses kill profits. Most of the time, capital ship prices react so much slower to market pressures, and demand/supply is has more influence on prices than base mineral cost, I think it insulates the capital market except when their is a massive price correction and demand crash like last summer.

Jester confidently (no one ever accused Ripard Teg of being timid) states:

Easiest question ever: calculate based on the market value of materials plus actual expenses at the time of sale. This applies even if the eventual calculation says you lose money.
If you disagree, sell me the rarest item in your house for the price you bought it for.

This broke my brain. Give me a minute. I'm having a hard time correlating the first two sentences with the last sentence because it feels like a false equivalency. Rare items are not necessarily more valuable but I think Jester is implying it is, like a first edition comic book for example, so assuming that interpretation I still have trouble correlating because the paper to make the comic book still costs pretty low, the value of the rare item comes from demand and supply, not material cost.

Regardless of my mangling of his example, his directive is one I've considered doing because it feels like a more accurate appraisal of profit.

Adam then replies:

As an accountant, you take the price that you paid as cost. The price of the paperweight would go up to 7 or 8 to cover the higher costs. If not, just buy all of the paperweights to reprocess them until the prices equalize again. This is why many manufacturers hedge their materials purchases (probably a bit harder in EVE)

Jester - Just because you use the price that you paid for profit calculations doesn't mean that you use it to determine your selling price.

To which famous Dirk Macgirk adds:

Yep. If building a single item it's fine to use actual costs incurred. But if running a longer-term operation, you start getting into purchases made over time. Oh God, shall we introduce him to FIFO, LIFO and average cost? And let's not forget about amortizing the cost of blueprints, which according to Universal Accounting Standards must be done over no more than 1 year.

This is kind of what I'm feeling in my gut, that if I expand my operations any more it will be more accurate and efficient to run fiscal periods with expenses and assets and calculate profit that way per period. That's kind of scary real economics and I'm 20 years past my first and only economics course in university. This is where EVE moves from game to simulator for me.

Talvorian Dex says:

In economics, the value, profit, and revenue are all real values, calculated from actualized results. What you're describing is opportunity cost. Because you used the resources to achieve these actual results, what was the value of the best alternative option you could have pursued?
But that's a theoretical calculation to talk about efficiency, given perfect prescience.

This is when I realized I was way over my head.

Finally Gevlon drops in:

Always use actual prices. If you stockpiled trit to build a dread and trit prices go up (without dread prices), then don't build a dread but sell the trit. More money, less work.

You seem to start to realize that trading (buying low, selling high) is much more profitable than actually doing something.

Truthfully, a few years back I made my second fortune doing day trading in large expensive items in Amarr and while I found it profitable it did not satisfy the "want to make something" itch. PLus I found it took too much of my meager time to manage properly, whereas cap manufacturing  is a lot more offline.

Thanks to everyone for the amazing comments! Definitely gave me a lot to think about.

What is the Value?

What is the value of a unit of tritanium?

You might think this is a trivial or even stupid question. You can go on the market and look it up using EVE Central's home page and say its selling for 6.01 ISK in Jita. There, question answered.

But that's just the current price of tritanium and we all know price changes as supply and demand fluctuate, just like in this graph I screenshot today:

The reason I ask this loaded question is because as I entered dreadnought production and brought investors into my Project Vulcan operation, I decided to keep a closer eye on the books and more accurately track profits for dividend payout reasons. This led me into the question of the best way to calculate profit and that leads to what is the actual value of the minerals I use in building a ship.

The easiest answer, and the one I have chosen to go with as its the most obvious, is that the value of the minerals I buy is the price I pay on the market.

However, follow me along on this thought experiment. Say I buy a piece of trit at 2 ISK (there was a time...) and then use it to build a paperweight (no blueprint required) with a factory cost of 1 ISK. So it cost 3 ISK to make, correct? And I sell it for 4 ISK so my profit is 1 ISK, correct? But what if the market changes while my paperweight is building and the new price of trit is 5. Is my profit still 1 ISK or is it now -2 ISK because the cost of production went up to 5 (price of trit) +1 (factory costs) = 6 ISK?

Obviously, my wallet is 1 ISK higher so my profit must of been positive, right? Well, let's say I took my paperweight and reprocessed it back down to tritanium (assume perfect recycle and no overhead cost for this example) and I then sell that piece of tritanium for 6 ISK. Now my wallet is 3 ISK higher instead of only 1 from selling the paperweight.

In other words, should I calculate my profit based on actual wallet balances or potential wallet balances?

The real example is when I'm building a dreadnought, and the prices of minerals have changed so much between when I bought them and when I'm ready to sell the ship, should I consider the current prices of minerals and calculate profit based on the new prices?

As I said, the obvious answer here is no, and go with the actual wallet balance after selling as the profit, but I find the question fascinating for some reason.

Minerals Prices Spiking

Price of Megacyte in Dodixie right now... I really wish I was that guy who bought the 8 million units in March.

PLEX Prices

Recently PLEX prices on the market have climbed through the roof and have gone over 800 million ISK per unit. The lowest sell prices in Jita today are at the 810 million point with the highest buy order at 803 million ISK. When faced with the decreased amount of player activity observed recently it seems rather counter-intuitive as one would expect there to be a correlating reduction in demand which should lead to lower prices, right?

Click for full size. Provided by @Sidrat2011, thanks!

Well, let's do an Economics 101 class and see if we can't make heads of tails of this a bit more.

Supply and Demand...

We are all probably well familiarized with the concept of supply and demand. In a perfectly competitive market with all other factors being ignored and the assumption that the sellers want the best price for their goods and the buyers want to pay as little as possible but neither side wants to wait very long (i.e. they do what it takes to sell / buy as quickly as possible), then supply and demand impact the price point at which a product will sell. As supply increases, the price will decrease and vice versa; as demand increases, price will increase and vice versa.

Example of demand increasing from D1 to D2 and therefore price increasing from P1 to P2 and quantity changing from Q1 to Q2.

The less well known part of that concept is that changes in supply and demand affect the quantity moved as well, so keep that in mind as I think it may come up later.

So as stated in the intro, since there are fewer people logged in there must be lower demand for PLEX and therefore shouldn't the price decrease? Well, there may be fewer logged in players but there is no current knowledge that the number of subscriptions funded through PLEX has decreased the same amount; the volume of PLEX sold has decreased over the past few months but not as much as the PCU has fell, I'm guessing only about 10% from a glance.

Nevertheless, prices are rising and not decreasing! Something is a play here. Is it possible that demand has increased against our initial assumptions? Could the changed New Eden Store and ship paint jobs that require PLEX converted into Aurum to purchase be increasing demand? If this was true, we'd expect to see that quantity sold increasing or at least holding steady but that is not the case.

Perhaps the pressure is coming from the other side of the equation. As discussed above, when supply increases prices will decrease and quantity sold will increase, and when supply decreases then prices will increase and quantity sold will decrease. Interesting. 

Let's do a scenario so see if my adhoc hypothesis holds up. Let's say both demand and supply have fallen. The lower demand means prices will fall but the lower supply could counteract that fall, and even reverse it if the supply drops off enough. Note that we don't have an easy graph to see how much the supply is at any given point, only the volume of goods sold and the price they sold at. On the other axis, if demand and supply both decrease then the quantity sold will decrease as well, which fits (albeit not as easily) with what we see.

TLDR: its possible based on my simplistic understanding of economics and the current state of the PLEX market that both demand and supply have fallen, leading to an increase in prices and decrease in overall volume.

If correct, and that's a big if, we can postulate that if the concurrent users logged in numbers correlate positively with supply and demand, then PLEX prices could decrease if the PCU count recovers and climbs to higher levels again.

* * * * *

I was going to talk about Price Elasticity of Demand / Supply but I'm already feeling way out on a limb here. Basically from what I remember the idea is that the elasticity is a measure of how much a buyer will tolerate a changing price before they decide to not buy the product. A lot of factors plays into the elasticity like how much the item is needed, how much it costs compared to the buying power of the purchaser, etc. I'm going to wildly guess that the price elasticity of PLEX is pretty high, i.e. the price can increase quite a bit before a buyer will opt out of the market, hence why the volume sold has decreased so little in comparison to the price increases.

But that is even more of a wild guess than the rest of the post so take it with a grain of salt.

UPDATE: EVE Altoholic has better analysis with lots of graphs and expertise behind it. Go check it out!

The Price of Power, The Cost of Doom

Lowest Reported Price of HACs

Ship	ISK (millions)
Cerberus	220
Eagle	140
Sacrilege	175
Zealot	132
Deimos	180
Ishtar	185
Muninn	141
Vagabond	151

Courtesy of EVE-Central as of Sept 9, 2013

HACs are too expensive for the increase in power that they give vis-a-vis the Tech I cruisers.

This does not affect most other Tech II classes as they either provide unique capabilities not found in their Tech I counterparts (as in Covert Ops, Stealth Bombers, Interdictors, Heavy Interdictors, Recons, Command Ships, Black Ops), or the boost they provide in performance is considered worth the extra cost in enough cases to matter (see: Assault Frigates, Interceptors, Logistics)1.

Command Ships are especially notable as they used to be not worth the ISK but I'm finding, as many others are, that the changes make them attractive to consider in place of the ubiquitous Strategic Cruisers. 

But this is about HACs.

The easiest comparison to make is looking at Assault Frigates which are essentially the same concept in a smaller hull size: same role as the Tech I conuterparts but with my tank, gank, and a role bonus for MWD usage. But it works for Assault Frigates; I've been flying more of them then Tech I frigs this past few weeks. But why?

If you compared the price of a hull and full fittings of a Tech 1 Merlin versus a Tech II Harpy, for example, you find that the Tech II ship is approximately 3 times more expensive all told, pegging in around 35-40 million compared to 10-15 million depending on fits. While that's a significant jump in price its manageable.

Now look at a Tech II HAC versus Tech I combat or attack cruiser. If you go with typical Tech II modules for fitting both ships fall in the range of ~20-25 million to fit, but the base price of the hull is about 10 million for Tech I to at least 140 million for Tech II. In the frigate comparison the fittings (which are roughly equal on both ship classes) are the majority of the ship cost, but in the larger hull size the fittings cost is the majority of the Tech I ship (putting it around 30-35 million) but a fraction of the cost of the Tech II version (putting it around 160 million for the cheaper HACs, over 200 million for the more expensive ones).

While the ratio is about the same (i.e. Tech II fully fit ship is 3-4 times more expensive), the scale is notable. Players have a threshold for what they think is worth the reward (The Price of Power) compared to the acceptable risk (The Cost of Doom). Depending on how rich a player is that threshold can change; for some pilots in Faction Warfare, Assault Frigates and Tech I cruisers are beyond that threshold, but for many they are not. I'd say the threshold for many is the ~75 million mark, maybe closer to 100 million.

But for almost all, that threshold is below the cost of HACs. And I suspect a lot of EVE feels the same way.

So what do I think the price of HACs should be? Personally I think the 100 million mark would be ideal. That would make it close to that threshold of what players are willing to spend and risk losing for the power while still making them ~10 times more expensive than the Tech I hulls they are based on.

The question now is if the balancing pass has made them enticing enough that some demand will increase thus convincing producers to make more and with an increase in supply driving the price down through competition. Or if an increase in demand coupled with static supply will drive prices up.

Time will tell.

1 - We'll talk about Electronic Attack Frigates after they are visited by the balancing pass.

OTEC and Null Sec

I watched the development of the OTEC cartel (Organization of Technetium Exporting Corporations) with a little concern for my wallet and a lot of interest for Eve politics. The apparent goal of OTEC is to price fix at a high profit this fundamental component of tech II production while providing mutual support to ensure each member's source of Technetium is protected from outside influence.

So far since its announcement in late April they have succeeded in doing just that.

Can you see where OTEC started?

I see this development as a natural step of Null Sec's political evolution. Alliance leaders, like any business quickly become addicted to easy sources of income and this leads them to realize that cooperation is often more profitable than competition with other entities in their market. There is a reason that governments have laws to prevent monopolies and oligarchies in markets in their nations: competition is good for the consumer, not the producer (in the short term anyways). The main issue is that prices are kept higher to maximize profit at the cost of the consumer, but a secondary problem "in the real world" is that companies with cartels like this are less likely to invest in innovation for competitive advantage and are more likely to collude to maintain the status quo.

However, in Eve there is no chance at technological innovation. We can have process innovation (e.g. 3rd party tools to monitor POS towers and keep track of silo levels) and organizational innovation (e.g. better social structures to mine the moons more efficiently and protect them) but we can't have technology innovation (e.g. a new source of technetium or a new material to replace it) without CCP changing the game, much like they did to make Technetium the One Ring of moon materials a couple years ago (replacing Promethium and Dysprosium as the top dogs).

There has been a lot of talk out of Reykjavik about how having certain areas of the cluster more rich than others is a conflict driver for promoting wars. Like King of the Hill, the kids at the bottom work hard to push the guys at the top off in a never ending cycle, right? The problem is with Technetium is that the current kings of the hill stopped fighting each other and are getting fat and strong off the top of the hill, leaving the kids at the bottom to be forced to throw occasional snowballs instead of an ineffectual climb up to simply get a snow face wash.

Technetium will be nerfed, its only a matter of time. Its been longer than I expected for sure; I predicted it being addressed in Crucible and was sorely mistaken. But the fact is that while it may have been a great conflict driver and possibly responsible for the fall of the Northern Coalition, it is no longer doing so and is in fact doing the exact opposite as evidenced by OTEC.

How will CCP address this? Ring mining to introduce a non-alliance active source for moon materials has been discussed and something I'm very in favour for. Rebalancing moon materials so that the other R64s are as valuable as Technetium has been mentioned. Overhauling moon mining completely has been suggested. But right now, we don't know which of these options CCP is most likely to do.

Time will tell. In the meantime, expect your ship prices to continue to look like this:

I leave it as an exercise to the reader to compare with the Technetium chart above.

Live Blogging The Quarter Economic Newsletter

New QEN, new post! As I read, the thoughts and pondering of your humble blogger. ONWARDS!

Cover Page - Oh pretty! (I didn't say they would be deep thoughts)

Page 8 - Population spikes followed by dips appears to be the new norm. Overall trend is still going up however. Will Tyrannis with its built in Planetville contribute to more subscriptions?

Page 9 - "The least flown capital ship was the Ragnarok." - No kidding, it looks horrible. I wouldn't be caught dead in the thing.

Page 10 - The population shift from East-West to North-South a result of the polarization of the North Coalition versus South Coalition war?

Page 11 - W-space population growth will only increase with the exploit ability of planets now. Beyond ice wormhole life is practically self sufficient .

Page 15 - Dropping prices for high end minerals attributed to increased availability in null sec. Yeah, I buy that.

Page 19 - Prophecy hull best Amarr hull, C/D?

Page 21 - "production of Tech II ships dropped by 31% from November to December" - No kidding the prices were getting INSANE!

Page 23 - 24 - Wormhole space overall has been a great addition to Eve. I hope future developments further develop this part of the game, i.e. w-space outposts.

Page 26 - Almost 40 thousand Strategic Cruisers have been built.

Page 29 - The Loki is the only one where the Covert configuration is more popular and sheer DPS.

Page 30 - "Strategic cruisers are becoming increasingly popular in PVP, with more being lost to other players than to NPCs in the last quarter." - *Snicker* Made me laugh.

Page 34 - More hacking in null sec space due to increased number of complexes.

Page 39 - Does that Rokh look like it has a larger drone bay to you?

How Not To Sell A Ship

So I see a thread of someone selling a Wyvern for a decent price:



The inital post is a little rambling, talking about character and officer mods possibly for sale as well, but we see twice that the price is 15 billion. Except that he then says starting bid is 15 billion. What the hell? Is it a sale or auction?


Then a bumping post seems to reinforce the selling of the Wyvern.


But I'm unsure so I post to clarify, asking what the deal is. What is the response?


The "current price is 16 bil"! No sign of bids in the thread, so unless he got bids via Evemails it seems like he pulled the higher price out of his ass. Couple that with the weird sentences that follow and I'm not confident that this guy can tie his shoes much less transfer a supercarrier to a buyer.

I understand that his first language might not be english, but the lack of capital letters, proper sentence structure, coherent thoughts, and short forms for already short words leads me to think... otherwise. Needless to say I'm going to pass on this one unless I see the price drop.

13 Billion and Counting

The Wyvern Project goes well. Most of my assets have been liquidated, with only a handful of PvP ships and a number of items in my industry alt's care still owned. All told the tally is at 13 billion ISK, all of which is in the hands of my trade alt and running market orders when I have some time.

I figure I need at least 15 billion before I have a chance at a purchase, and probably closer to 20 billion for a complete package. Lots of work to do yet.

I estimate my trading alt is making between 20 and 50 million per day right now. If I had more time, I could make more but my time is what it is and I have to focus on items with less competition and yet still decent volume. I have to get back in the Eve Tribune saddle and start writing for them again to add to the ISK flow. This Wyvern is not going to equip itself!

I would kill for the ability to build this ship myself, but our space is Providence is under dire threat and I'd hate to lose the whole shebang on a sovereignty loss. Ah, to anchor X-Large Ship Assembly Bays anywhere!

If anyone hears of a great Wyvern deal on the intertubez, let me know.

Faction Items for Sale

As part of the great 2010 asset liquidation, I have a bunch of faction modules gathered over the years that NEED TO GO! I'm offering here first before going on the public forums in a couple days. The prices are about equal to current lowest contract prices in high sec, and all items are located in Amarr system.

Propulsion:
Coreli C-Type 1MN Afterburner - 12 mil
SOLD - Domination 100MN MWD - 25 mil

Armour:
Shadow Serp reflective plating - 750 K
Shadow Serp Thermic Plating - 750 K
True Sansha Reflective Plating - 500 K
True Sansha Thermic Plating - 500 K
Dark Blood Energized Magnetic Membrane - 2 mil
Shadow Serpentis Energized Thermic membrane - 1 mil
Shadow Serpentis Medium Armour Repairer - 38 mil
SOLD - Shadow Serp Armour Kinetic Hardener - 7 milSOLD - Shadow Serp Armour Thermic Hardener - 10 mil
SOLD - True Sansha Armor Kinetic Hardener - 11 mil
SOLD - True Sansha Armor Thermic Hardener - 10 mil

SOLD - 2 x Imperial Navy Energized Adaptive Nano Membrane - 35 mil each
SOLD - True Sansha Energized Adaptive Nano Membrane - 35 mil
Turrets:
2 x Ammatar Navy Mega Pulse Laser - 55 mil each
2 x True Sansha Mega Pulse Laser - 55 mil each

Shields:
Gistii B-Type Small Shield Transporter - 1 mil
Pithi C-Type Small Shield Transporter - 1 mil
SOLD - Gistii B-Type Small Shield Booster - 40 mil
SOLD - Domination Invulnerability Field - 50 mil

Misc:
Shadow Serpentis Medium Plasma Smartbomb - 3 mil
Domination Stasis Webifier - 75 mil
SOLD - Domination Warp Scrambler - 80 mil

Will consider reasonable counter offers and multiple item discounts. Email kkodachi@gmail.com if interested.

Simplify

I started trading again.

I took 850 million ISK, put my trade alt in a hub, and told him to make money or get shot in the face. Not really sure why, its not like I need the money as I have a ton of ships already. I think I figured with time being constrained for the foreseeable future, I wanted something easy I could do to still log in and be active in Eve.

As part of this summertime activity, I think I need to simplify my hanger. I'm going to move a whack of assets gathering dust to Amarr and sell them. Then take the ISK and invest it in more trading or whatever. After all, I don't really need several battleships doing the same thing (short range low sec brawler) and I think I'm good after the third sniper cruiser. Perhaps if I played more often and lost ships more frequently I would do well to have lots of spares, but right now all I'm doing it collecting ships that I have barely any experience with.

We'll see how much money I'm left with after selling off extra assets and playing the casual trading game. If I get half way to affording a Wyvern, I might decide to make the push and go for the ship. We'll see.

* * * * *



Let's take a moment and check in with the Carebear Brigade! Its been a while since I peek in on my high sec miners...

Why those lazy layabouts! Time to whip them back into shape!

Live Blogging The Quarter Economic Newsletter

The Q4 2009 economic newsletter is out! Here we go with our live blogging of my reading of it. Enjoy!

Page 6 - More Eve subscriptions than the population of Iceland.

Page 9 - Hulk drops from top spot of the "ships people are in" snapshot. Hulkageddon effect methinks. Drake now most popular... someone's head in our alliance just exploded.

Page 11 - Caldari space pilot density almost twice that of the next highest. Most populated Null sec area is the "West" regions (Deklein, Fade, Pure Blind, Cloud Ring, Outer Ring, Syndicate). Providence most populated null sec region with 85.1 pilots per system! More pilots per system and Aridia in Empire.

Page 13 - 27000 pilots in Jita. E-gads! Over 472,000 pilots total in Eve. "[A]lmost 15% of the total population of the EVE universe being located in the top 10 of 7,700 accessible systems."

Pages 14 - 23 - All of the price indices showed a huge drop in October time frame.

Page 24 - The Forge commands 53% of relative share of total trade value. Jebus! Jita is a monster, isn't it?

Page 25 - A graph also known as "The Rise of JITA!" Feel bad for old trade hubs that used to compete in Placid, Genesis, and Essence regions.

Page 28 - "The trade for this particular day is at 140 billion ISK per hour and then declines to about 80 billion ISK as Europe and the US go to sleep." /me faints."The number of transactions follows a similar trend, with 8 to 10 thousand transactions per hour – or about 3.3 trades per second during the peak hour."


Page 29 - "The item that had the highest overall trade value was PLEX – the Pilot License Extension. It was by far the highest trade value, with 328 billion ISK used to trade 1,159 individual PLEXes." Each plex costs $17.50, so those traded PLEXes represents about $20280 in real money.

Importing Goods

Last night I had purchased the parts for a sniping Tempest as per this setup here  for Kla'strit (as well as Citadel Cruise Launchers and ammo for Lord Rhavoc) and wondered how to get it to Providence. The first option, simply flying it down, seemed fraught with low sec and roaming reds peril. Plus it didn't involve big ass capital ships.

The second option involved having Kirith bring up the Ninveah to low sec, throwing the assembled Tempest in the ship hanger, and jumping it back down. Seemed like a lot of work for one ship.

The third option was to simply use the Nomad jump freighter and bring the Tempest down with a bunch of other stuff for sale. This is the choice I opted for.

I checked the markets in both places and purchased 32 Flycatcher and 12 Heretic Interdictors which should make me a tidy profit after they sell and the cost for docking and jump fuel. Plus it helps allies who may need ships locally and, jove knows, the Interdictor is a ship that tends to die a lot.

So after all this was done I was sitting in station putting my shiney new Tempest battleship together when I had the sudden surprise that Kla'strit, a 50+ million skill point pvp character, does not have the Engery Grid Upgrades V skill level for using Reactor Control IIs. This is a difference of 1000 power grid from Tech I to Tech II module stats and my build cannot work without it. So I might take the 9 days to train it up once Kirith is complete with Cruise Missiles V.

Incidentally, getting Energy Grid Upgrades to V opens up Marauders for Kla'strit. Any opinions on the Vargur out there?

Damn You Accessible And Well Populated Null Sec Region!

I had a few minutes last night and I was hatching a plan. I wanted to make money.

Not because I need more ISK as I am well stocked with ships and equipment and have no pressing needs for anything besides the unaffordable Wyvern (which I do not have patience nor nerves to work towards) bit because I thought a non-combat task to do in quiet times when I don't have voice comms would be interesting.

I decided to try importing goods from high sec into Providence, theorizing that buying low in a hub and selling high in null sec was a "cannot lose" proposition. As I opened up two clients and compared prices of items I was in for quite a shock. Yes, there was profit to be made, but a lot of items were cheaper in Providence than they were in high sec. Some items actually were cheaper in high sec and a couple even showed promise of profit around 50-60 million per trip (minus fuel costs) but that required an outlay of almost a billion ISK and I was hoping for something in the hundreds of millions profit for my efforts.

I'm going to keeping looking at some more item but right now in station trading looks easier and just as profitable for the time required.

Why are prices in Providence so competitive with those in Domain high sec? I figure there are a couple reasons, the first being that Providence is easily accessible to high sec through a couple pipes and easy jump freighter access. The second is the large population, both holders and neutrals, which gives incentive for importers to run the risks and bring things in as well as allowing normal pilots to just sell regular surplus items.

Live Blogging the QEN - Q3 2009

Keeping with tradition, I'll live-blog the QEN as I read it. Enjoy!

Page 4 - Editorial paraphrased: "Blah blah blah"

Page 5 - Population holding steady but only covers up to June 09.

Page 5- Ships used: at the time of the snapshot, 42% of the ships were shuttles, rookie ships, or capsules. MY GOD! Is there ever a market for tech II shuttles!

Page 6 - "The Condor advanced from 13th place to 10th, making the Top 10 for the first time." - HUH? Why?

Page 8/9 - Huge drop in volume of Morphite traded in Sept, yet no change in price. Interesting.


Page 10 - "The deflation in the SPPI for September measured 8.6%, which is an exceptionally large decline. This drop was almost exclusively fuelled by a 24% collapse in the price of salvaged materials, which weigh heavily in the index. This was the effect of introducing different sized rigs, which is discussed further under the Consumer Price Index section." - Take that mission whores!

Page 13 - Avg CPU per user drop is illustrative of why macros are bad for the game.

Page 15 - Poor Wrath Cruise missile producers!!! LOL!

Page 21 - W-space is being used as evidenced by supply of Neurovisual Input Matrices.

Page 22 - Stealth Bomber changes still obvious. Tengu prices seem to have reached the plateau.

Page 24 - "Figure 41: Glossy Compound is a material that can be looted from the wrecks of Rogue Drone battleships and refined to yield various minerals. This item has been significantly affected by actions against real money trade accounts, with sharp declines seen in both March and July after the two large-scale bans of real money trade accounts were performed." - RMT players dealt in drone poo? Really? Odd.

BACK FOUL TEMPTRESS!!

Last night I was on for a few minutes and reading the forums and saw an alliance mate looking to sell his Phoenix Dreadnought at a discounted price to someone in the alliance.

Cue the wallet burning a hole in my pocket.

I made an offer of a billion in case he was in a hurry to unload it and carried on with activities. A little while later I checked contracts to get a feel for how much dreadnoughts are going for these days. The lowest I saw was a couple going at 1.15 billion and here is what went through my head.

"Hey, that's a good price! Average is around 1.4 bil."

"That's in this region too."

"I have 1.15 billion ISK. I'll just log into Derranna and transfer the cash I need..."

"But I haven't heard a yes or no from that alliance guy. I'd feel bad if I bought this one and he then contacted me in hopes of selling his."

"Plus its a lower price. I should wait."

"But what if he says no thanks and this cheap Phoenix is snatched up by someone else in the meantime?"

"Gah, patience, gotta have some."

And with great reluctance and no dreadnought I logged off. Its a good thing too; this morning when I woke up and thought about last night's episode I had almost-buyer's-regret, that feeling that you would have felt bad had you bought the thing you almost bought but didn't because of one little situational roadblock. The feeling you know you are weak and it wasn't willpower that saved you.

Anyways, if I get the cheap Phoenix I'll probably flip it for a hundred million or so profit because I never seem to have time or a need for a dreadnought, the corp has a spare for emergencies, and I need to buy some skillbooks and parts for my restarted tech II production line. For example, this morning I spent about 90 million to get parts to build 40 covert op cloaking devices.

Dark Side of the Sun

I've stopped my trading enterprises recently. I've got over a billion ISK in my wallets and no looming ship purchases. My hanger is full of combat ships ready to go of all sizes and classes. There are no expensive implants I feel the need to purchase, and no outrageous skills that can't be covered with an Eve Tribune article or a few hours of ratting/missions.

Essentially the part-time trading was profitable but I was reaching the point where I either had to spend more time doing it to the detriment of other activities, or I had to stop. I'm not a halfway guy in regard to my obsessions.

But I still need something to do with those 15-20 minute chunks that sprout up during the week. When we were in IRC I did a lot of logistics to Etherium Reach from Empire. There is not such a need in Providence. So I've decided to start up the invention game again, making some Tech II BPCs to build from and sell.

I've got a backlog of some Tech II BPCs including about 10 Invulnerability Field II BPCs, and I had 8 Prototype Cloaking BPCs that I invented up to get 4 Covert Cloak BPCs. I'll have to dig up my production spreadsheets so I remember what to buy to build them.

As for selling, I think I'm going to try and sell them in Providence instead of an Empire hub. A win-win scenario: allies get local access to goods at a reasonable price and I get a bit more profit than in Empire.

Live Blogging the QEN - Q2 2009

A new quarterly economic update from CCP on the Eve universe and once again I shall live blog my reading of it.

Page 1 - AWESOME OPENING GRAPHIC

Page 6 - Paraphrased editorial - Blah blah Eve Bank blah blah tiny effect blah blah single shard

Page 10 - "Currently there is more than 300 trillion ISK on all accounts within EVE, of which 170 trillion are on active paying accounts." That means 130 trillion ISK just sitting there locked away. Can I haz yur stuff?

Page 11 - You play more, you have more money. ISK is the grind in Eve people, not levels. Not surprisingly, those in null sec are the richest on average. Is this due to the resources there or the fact that more experienced and established players tend to survive there better?

Page 14 - The Distribution Of Characters in Security Space graph doesn't make sense to me. How can the left axis be system security status and then the first three bars be null sec? Null sec is negative securityy numbers.

Page 15 - Also, the ship types being used chart is very interesting in noting that the Raven is falling fast. I assume this snapshot was taken after Unholy Rage banned 6000+ macro accounts?

Page 16 - The Tech 1 frigate is still king after all these years.

Page 17 - Take freighters out of the capital group, and carriers make up over half of capital ships. Being cheap and flexible has its advantages.

Page 18 - Covert Ops is most popular tech II ship is unexpected at first, but considering its cheap cost and utility in both PvP and PvE-exploration, I can believe it.

Page 19 - Nighthawk, despite its powergrid issues, is the most popular command ship. This is entirely due to its use in PvE ventures I reckon.

Page 22 - Interesting: "Quantity traded is increasing at a faster rate than demand, thus prices are declining in general. The increase in popularity of the Hulk is therefore interesting in this context. There are more mining barges in the game than ever before, in addition to a considerable increase in the number of missions run by players and NPC kills. Since a sizeable part of all minerals in the game come from refined loot, the increased supply of minerals, along with lower prices, is most likely attributed to these two causes."

Page 31 - "To summarize we can state that the EVE economy is healthy. There is mild deflation, but with the increase in economic activity there are good prospects for continued economic growth for the rest of the year."

Page 35 - Id be interested to know how many Tech II BPOs are used to make BPCs for production, or if all BPCs come from invention for this graph.

Page 35 redux - "Excluding drones and ammo, approximately 9.8 million Tech II items were produced in Q2. Out of these, 6.5 million items were produced from BPCs, with the remaining items being produced from BPOs. Proportionally, a third of all Tech II production is executed with BPOs, and the remaining is done with BPCs." Empahsis mine. Holy crap, tech II BPO holders are making a lot of money then since most tech II prices floor around where invention is barely profitable.

Page 37 - "The most popular regions to produce Tech II items in were Lonetrek, The Citadel, and The Forge. They alone accumulate for 49% of the total production of Tech II items." When I see someone complain of full production slots, I assume they are in Caldari space. Sigh.

Page 39 - "We also examined the productivity in each security tier of lowsec space more closely. It is interesting to note that 0.4 security space is the most productive tier, accounting for 74% of total lowsec production as can be seen in Figure 26."

Page 40 - Most tech II ships are produced by BPOs (56%). This is due to the pain of failed invention tries for expensive ship BPCs, datacores, and decryptors to make it worth it. It also suggests that ship Tech II BPO holder are still raking in vast gobs of ISK, maybe not as much as before, but too much. I'm of the opinion that its time for Tech II BPOs to go away.

Page 42 & 43 - Its interesting that HACs are produced mostly by inventors while interceptors are vastly more produced from BPOs. Probably due to the profit from invention for HACs being sufficient enough to justify the hassle.

Page 48 - "The five most popular types of Tech II ammo account for roughly 34% of all produced units, with the most produced ammo type, Scourge Fury Heavy Missiles, accounting for about 12% of the total amount of Tech II ammo produced." The guys with the Scourge Fury BPOs are laughing all the way to the bank. The guys with BPOs that are not of the 5 most popular are probably disenchanted.

Page 50 - Blockade Runners and Stealth Bombers getting Covert Ops cloaks really drove the volume of those items through the roof, but supply kept up with demand and we still saw a price descrease. Sucks for me.

Page 55 - It may look like a complete reversal of fortune for the Falcon and Rook at first glance, but look closer: the volume of sales for the Falcon is still 1000 units more per month than the Rook.

Page 57 - Prorator graph is actually stealth bomber information.

Page 60 & 61 - We see with the Seige Missile Launcher II and Concussion Bomb volumes that the stealth bomber changes were well received.

Page 63 - I love see Icelandic names in the native character set.

See you next quarter!

Update: Politics, PvP, Skills, Markets

So, back before I went on my two week vacation I talked about how we were in the process of joining a new alliance. Well, our CEO decided the fit wasn't perfect for us and we have been relaxing back in Tash Murkon region while we review options and explore other alliances. However, we have remained NBSI which means hunting in low sec in the meantime for anything that moves.

Which segues nicely into this pathetic little kill. Allow me to explain.

I logged on Sunday night finally free from distraction to go roaming looking for action, but since the corp was quiet I was on my own. I decided to try to dual-client myself with Kirith in his trusty gank Falcon and Derranna in a Covert Ops for scanning down targets. I wanted to see if two characters would be more efficient than one using the directional scanner.

I tried first entering into a system with a lot of pilots in it and using scan probes to encompass the system and find possible targets. This did not work out well as it takes a fair amount of time to isolate each hit in return to actually determine what it is and if its at a location I can fight, i.e. belt or planet or safe spot.

Then I tried the trusty directional scanner method and once I had a target that was fairly well placed (i.e. within 1 AU of my position and not at a belt) I used the scan probes at short range to find it. In this case, I located a Slasher and the scan probes found it sitting empty at a POS. Normally this would be the end of the story except it was outside the POS shields for some odd reason.

Well, I was nearing the end of my time and I was curious if I could set myself up for a run at the frigate while not getting smoked by the POS sentries or uncloaked too soon by the nearby structures and forcefield. I took three tries at it. First I came within the shields too soon and had to warp, then I got close enough to engage with Null ammo but the tracking penalty meant I couldn't hit it as I was moving aligned to a planet, and then I decided ot just drive straight at the Slasher with antimatter flying as it seemed the guns had trouble tracking me well enough to blow through the shields. The third time's a charm and the frig blew up and I warped away with most shields gone but some insight into POS drive by's learned.

And another segue into Derranna!

My industrial alt has not been training too much industrial skills lately. For one thing she is very skilled in that regard already and can build every Caldari ship with only a couple exceptions. Shield can reverse engineer and buiold Tech III components and hulls for the Tengu. The only industry related activity she can't do is serious mining and I have Grumhold the miner for that. So she's be training for the Scimitar and then I realized she was qualified for Recons so I bought that skill along with Propulsion Jamming for warp disruptors and stasis webifiers. I'm considering trying a duo of Kirith in Falcon and Deranna in Rapier for when I'm "solo", the Rapier for the hunt and tackle while the Falcon provides jamming and DPS. Could be fun.

As she becomes more and more of a combat pilot, the question arises: what next? She has no gunnery or missile skills so should I train those up and make her a full blown combat alt? Get a Vagabond? Or should I go more down the road of more capital ships?

Right now I'm leaning towards the carrier and Rorqual route despite their expense. I really don't want to spend months training weapon skills for a second character, and having another logistic tool in my belt would be a boon to the corporation and any furture alliance. I've got time to mull my options though as the Scimitar training is finishing in 4 days and I'll need a couple weeks to my my tackle Rapier well trained.

Speaking of industrial activities (see what I did there?)...

I haven't done much the past few weeks to be honest. I did build 9 Manticores and sell eight of them, but no invention or other building has occurred. The main reason being that I've used my free time for my trading activities which continues to bring in ISK at a decent pace. My initial 791 million investment is untouched and the proceeds from that investment have bought: numerous skill books; the Scimitar, Rapier, Crow, Raptor, and fittings for them including rigs. And I still have a couple hundred million extra ISK.

I'm seriously considering not bothering with tech II production as it seems more of a hassle especially when you are doing multiple inventions and having to set each one up individually time after time after time... and same with building the resulting BPCs... its just a pain in the ass. Trading on the other hand is quick and relatively painless 3 or 4 times a day to make easy isk off of other pilot's laziness and impatientance. And the amount of profit is equal too or greater than invention nowadays.

So we'll see if I get more time later on to spend on production.

* * * * *
Ok, I think that gets everything of import in my world up to date. Back to our regularly scheduled blogging!

Ok, This Is Insane (Not!)

Ok, I admit I went into hyperbole last post about the potential profits of trading. No one is going to make 347 million ISK from 100 million by trading for a year.

As MarvinDaMart said:

Oh yeah its the easiest way to make isk. But don't kid yourself that your performance at the start can be extrapolated to what you make when you have 10s of billions of isk. As you start to saturate your markets you find that new isk markets become harder to exploit to the same degree and rather than 18% / 4 days you may find that its closer to 8 or 9 %. I currently average 1.5% per day but this is on tens of billions of isk so that amounts to hundreds of millions / day.

BTW you should check out the eve program called EMMA on the forums. Its a great way to track your isk making progress. It cost 100 mill but its well worth it imho. Anyways good luck!

The point is, every market has a sweet spot where beyond that the more you invest the lower the return. You can't buy more items than people are selling and you can't sell more items than people are willing to buy. Plus, competition from other traders cuts margins, as do game mechanic changes, market fluctuations, etc.

My last post should have had a disclaimer about these facts but I was a little too "in the moment" while writing it, drooling at the thought of buy a few dozen Wyverns for use (ignoring the fact you can't dock them). ;)

Still, there is money to be made by the patient and the clever. I recommend giving it a try.