Welcome to Jester's Trek.
I'm your host, Jester. I've been an EVE Online player for about six years. One of my four mains is Ripard Teg, pictured at left. Sadly, I've succumbed to "bittervet" disease, but I'm wandering the New Eden landscape (and from time to time, the MMO landscape) in search of a cure.
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Monday, April 4, 2011

If you play with that, you'll go blind

About 45 days late, the Quarterly Economic Newsletter for 4Q 2010 has finally been released:

I'll have a lot to say about this QEN over the next couple of days, because it covers a ton of ground.  However, given the circumstances of what's going to be happening in New Eden this week, I find the opening two sentences of the devblog highly ironic:
Warfare and the EVE Online economy thrive on each other.  Without warfare there is very little consumption in EVE Online and without a strong economy (and lots of personal wealth) wars can't be won.
Read that second sentence again and appreciate the irony.  I quite literally laughed out loud when I read it.  New Eden is currently the quietest that I can ever remember it from a warfare standpoint.  Granted, early spring is always the quietest time in EVE Online, but has there ever been an early spring when things were this quiet?  There's only one major war that I'm aware of: the fight between the NC and DRF in Geminate.  And that war is half-hearted at best.

And of course, in a couple of days, CCP will be launching their largest attack on toon "personal wealth" since the L4 mission nerf... maybe their largest attack on personal wealth ever.

As a matter of fact, the entire QEN -- despite only having been released to the players a few hours ago -- already feels like it's out of date in some respects.  The discussion of toon personal wealth begins on page 18 of the QEN.  In particular, it mentions that pirate bounties increased from 67.6 trillion ISK in Q3 2010 to 75.7 trillion ISK in Q4 2010, an increase of about 11%.  That bounty increase matched the increase in the overall amount of money in EVE, which also increased 11-12%.  There's a lot of dire foreboding about both this and the lack of ISK sinks on pages 18 and 19, and by page 20, there's this:
The bank has therefore proposed that in 2011 there should be a focus on increasing ISK sinks in order to curb potential inflation.
Yeah, I think there's been an alternative idea proposed for this one, Dr. EyjoG.  Thanks for your input.  :-P

So like I said, the QEN's only been out for a few hours and it already feels like parts of it are out of date.  The devs are clearly starting to take the economic warnings seriously, and have started playing with the economy as a result.  And as any long-time EVE player can tell you, when CCP starts playing with things, they don't go for half measures.

I also found the population data on page nine very interesting.  While overall population distribution in Empire stayed very flat in 4Q, there was a lot of movement in 0.0.  Unsurprisingly, the south and the southeast, places that were on fire in 4Q, emptied out.  Meanwhile, the biggest population gains?  The north and the west, areas that were mostly peaceful through 4Q.  Mord over at Fiddler's Edge wrote a masterful piece over the weekend examining a possible reason why.  Go read it.  It's very much worth your time.

Page eight has the overall account population of EVE: 357,000 accounts, essentially flat from one year ago... one could almost say stagnant.  Overall skill points per character increased in the quarter, which is not good news.  After the release of a major expansion, we should expect to see lots of new characters with low SP totals bringing that average down somewhat.  For reference, the average Caldari character in 1Q 2009 had 12 million SP.  The average Caldari character in 4Q 2010 had 15 million.  Hopefully, there will be better news in the 1Q 2011 QEN.  Page 32 has some clues why there was an increase in the average, referencing "return of experienced players" no doubt looking to convert their high numbers of Learning SPs.  That leads me to the next topic.

I found the following detail on page six and seven interesting:
...players have become concerned about PLEX prices. PLEX is (sic) sold on an open market in a free exchange between players, just like most other items in EVE Online. Our core design principle of being hands-off from these markets also applies to the PLEX market. However, due to its complex function and potential impact on the velocity of money supply, the Central Bank might intervene in the PLEX market in order to curb inflation or avoid sudden deflation in the EVE economy.
What's going on here?  Pages 30 and 31 hold a clue:
Frequently, [returning] players found themselves in need of cash to quickly reestablish themselves, so many of them chose to create PLEXes and sell them on the market. Average daily PLEX creation grew by 18% from November to December. This increase in supply outpaced the growing demand for them, which resulted in a 3.4% reduction in price. In turn, this increased spending on other items, which inflated their price.
That's putting it very mildly, since that 3.4% measures the overall price of PLEXes across EVE.  In Jita, PLEX prices dropped 40-50 million ISK practically overnight in November/December due to dumping.  That money went immediately into T2 cruisers made fly-able with the new SPs, particularly Recons, whose prices skyrocketed during the same period.  "Volatile" doesn't even begin to describe the markets.

So, I can understand Dr. EyjoG's worries.  After all, if PLEX prices go too low and $40 U.S. only buys you 500 million ISK in the legal RMT market, then that boosts the black-market RMT business where the same amount of money will get you double that, if not more.  On the other hand, if PLEX prices go too high, people who play the game with PLEXes can't afford them any more and their subscriptions will drop, relaxing demand for PLEXes and causing their prices to fall... thus boosting the black-market RMT business.

Dr. EyjoG's temptation to play with the PLEX market is therefore understandable in this context.  Somewhat.

I'll have more to say about this QEN over the next couple of days.  In particular, I'll finally get around to finishing that long-delayed post on mineral compression and the supercap market, since the QEN brings both of those topics up.


  1. I haven't seen this brought up anywhere else, but figured a blog post concerning the Economic Newsletter would be as good a place as any. Does no one remember PLEX prices rising due to speculation that they would be used in the announced-but-then-retracted PLEX For Remaps program? I sort of feel like that's already an Artificial Influence on the PLEX market. CCP announced a new use for PLEX, prices rose, they announced they wouldn't be used for remaps, and prices fell. I expected someone to at least mention this during the Economic presentation at Fanfest...but nothing.

    Am I completely misremembering this? Was it all just a dream? Do I need to lay off the alcohol?

  2. Nope, you're not misremembering. That did happen.

  3. Is there a suggestion there that they should've made Sov costs scale with true-sec rather than nerf the high-end anoms? That way they would have increased the isk sinks present in nullsec, rather than reduced the personal isk faucets.

  4. One interesting figure missing from the QEN is the retention rate of new players. That is, the number of players who convert their trial accounts into paid subscriptions, and the number of players who maintain their subscription after trial for more than three (or perhaps six) months. I do hope that CCP tracks those numbers internally; they're usually a good indicator of which aspects of the new player experience could use improvement. That the real server population has not significantly increased over the past year may suggest that player retention is not particularly high -- new players subscribe, hang around for a few weeks or months, then get bored and leave; alternatively, it might mean that the game is simply bleeding players at all levels, which is a different albeit still significant problem.

    Agree that the increase in bounty payouts is rather alarming from an inflation standpoint considering that the overall population in the game has not significantly increased. Would be curious whether most bounty payouts come from high-sec missions or from nullsec belts and anomalies.

  5. @Mike: it's a good thought in theory. In practice, with cheap sov, the big alliances would just swoop in, buy up those systems, and use those regions as buffers. It was the other problem Dominion was supposed to solve.

    @Anon0956: The CSM has asked for retention data in the past and been told that CCP (probably correctly) regards this as market-competition data that they don't want to make public. There's no question that they track it. They've let slip clues about this several times.

    And the QEN implies pretty strongly that most of the bounty ISK comes from null-sec. It specifies, for instance, that bounties overall increased 11% in 4Q but mission rat bounties increased 3.7%.

  6. Good analysis. I am so confused by their stance on PLEX, though. The market will correct itself. If PLEX falls too low, then they'll all be bought up and higher prices can be offered. If they fall low as the rest of the economy deflates, then we aren't rally losing anything.

    Should PLEX rise and become too expensive, then no one will buy them. This will cause players to sell PLEX for less, guaranteeing them a sale. I don't see why they're so worried...

    Also, carrying over a discussion from Twitter. KateYeatz is a douche (I hope you read this!). All she/he does is try to insult my intelligence, saying that I am a hypocrite and not current with trends (proven by my use of UMADBRO?).


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