Monday, 6 February 2012

Good Payments, Evil Payments

So, in my opinion the reward level of Incursions is fine, though hisec Incursions are a little too abundant for my liking. There is a different issue though, which returns to Tippia's topic of ISK Faucets versus Sinks. I have written about Faucets and Sinks before, go read that so you know my opinions on the matter.

Anyone who is not blind will have noticed that PLEX prices have been rising for a long time. Anyone who is not blind will have seen that PLEX prices flatlined about the time that Darius III was pushing the Incursion interdiction effort.

In my opinion, the latter is the cause of the former. Incursions are simply pumping raw ISK into the economy at too great a rate. While mineral prices are being held low by the sheer volume of supply, PLEX is the one commodity on the market that is guaranteed to serve as an indicator of the value of ISK: it's not created through player effort inside the game, so the ISK price of a PLEX is a certain indicator of just how much ISK players have available.

Now before I go further, there is one possibility that occurs to me that I must mention. This is tinfoil hat territory. Skip to "Now that's over, you can take off your tinfoil hat" if you don't care to read my bizarre conspiracy theory.

It is entirely possible that someone out there has enough ISK to hold the entire PLEX market hostage. It is entirely possible that this entity has a vendetta against incursions. It is entirely possible that this entity is deliberately manipulating the PLEX market to make it look like Incursions are the cause of inflated PLEX prices, when it is simply the case that a massive price fixing program is in action. It is entirely possible that an RMT cartel is deliberately trying to kill Incursions because demand for RMT ISK has been dropping due to the easy access that people have to ISK by running Incursions. Think about it: why buy a few billion ISK with your lunch money when you can grind that ISK yourself in a weekend of running Incursions with your BTL Pub & private chat friends, having fun?

I will point out that Occam's Razor does not apply to this situation. Occam's Razor is intended to address matters of nature: science in particular. EVE Online is a universe filled with malevolent and malicious entities, and in many cases it makes more sense to apply Occam's Razor in reverse. Is this new corp member really as stupid as he looks, or is he a spy trying to curry sympathy? Is the market being inflated by Incursion runners with too much ISK in their pockets, or is there a concerted effort to manipulate the prices of PLEX?

Now that's over, you can take off your tinfoil hat.

So, we're back to reality and we're proceeding on the assumption that the price of PLEX is being directly impacted by the easy availability of ISK through Incursions. We will now assume that there are a lot of people who will not pay real money for EVE, but are more than happy to spend a few hours with their friends doing activity X to grind the ISK to pay for EVE through PLEX.

Now remember that for every PLEX bought for ISK, one has to be sold for ISK. The people selling PLEX are approaching the issue from the perspective of, "wow! PLEX are worth 480M ISK - I'm happy to spend €17 to buy 480M ISK". The higher the ISK value of PLEX is, the more people will be likely to buy a PLEX to boost their wallet. On the flip side, the higher the ISK value of PLEX, the fewer PLEX I'll have to sell to fill my 4B ISK war chest. But let's assume that the average PLEX per seller is relatively low: say it's about 1.7 PLEX a month with a median of 1, so their need for PLEX won't decrease unless the ISK value increases by about 60%. Thus the supply elasticity of PLEX is very low: almost fixed.

How can we address this issue of Incursions impacting on PLEX prices? One option given our assumptions is to shift the rewards of Incursions away from freshly minted ISK to CONCORD LP. How would I balance this? I would look at the amount of ISK that is spent redeeming CONCORD LP compared to the amount of ISK rewarded by Incursions: so if S is ISK sunk through the use of CONCORD LP in various stores (I can feel the poor DBA wincing right now), F is the ISK flowing into the system through Incursion rewards, we could look at a situation where B is bad ISK: B = F - S. Thus B is the ISK that is inflating the price of PLEX.

How does that work? Surely, while S is sunk ISK, the capsuleer still makes more ISK by selling the LP store items on the market or through contracts? That is right, but that ISK comes from elsewhere: perhaps from someone selling PLEX to get that ISK. My assumption here is that ISK that comes from other players drives the supply of PLEX (players sell PLEX to get the ISK to buy shiny things). ISK that comes from faucets drives the demand for PLEX (player grind ISK to afford PLEX).

So how can we ensure that the Incursion-running player still gets the same rewards, while rebalancing the payouts of Incursions to avoid B entering the economy?

The simple solution is to reduce Incursion ISK payouts (F) by B, and increase LP payouts by B/F. Thus the Incursion runners will have to source some ISK from outside the Incursion payout stream to fully supply S. The sale of CONCORD or other LP store items should be enough to provide a steady income to the Incursion runner, by displacing the ISK from other capsuleer's wallets.

One option to support those pilots who are prepared to pay X for PLEX when PLEX cost Y:Y>X is for their friends to contribute Y-X. Some of us are really good at making ISK, and perhaps we have corporate programs in place for mining operations, wormhole operations, hisec ganking operations, etc. It might be worthwhile looking at contributing to a pot for a regular draw of a PLEX as a reward, the condition of winning the prize being that it gets donated to a corp-mate.

An obvious option for those who participate in the market is to buy PLEX using buy orders. The people selling PLEX are keen to get their ISK: that's why they're selling PLEX in the first place. So post a buy order for your PLEX at a sensible price (not top of the market) and you'll firstly get a significant discount on the PLEX price, and secondly remove a PLEX and a customer from the market being tended by the PLEX speculators.

PLEX doesn't have to be affordable to every individual pilot in order for every pilot to subscribe using PLEX. If your friend is good value and is actually trying to pay their way, you might want to consider lending a hand. Yes, that idea probably stinks of Communism or Christianity or some such nonsense. Deal with it.


  1. A few comments:
    - The publicly available CCP financials should tell you that there isn't enough PLEX outstanding to manipulate the PLEX market that hard. Its not foolproof, but its pretty solid evidence.
    - Other high ISK/hr activities like FW missions and pirate missions make their ISK almost entirely from LP - and in a lot of ways are straight up ISK sinks on the game. One of the key things about LP ventures is that they're highly market competitive. The concord LP store would probably need buffed, but then again so do the FW and Pirate LP stores...
    - This still doesn't do anything to affect the availability of high sec incursions. I don't know how much of a problem this is, but you seemed concerned about it in a previous post.

    Otherwise, I am in favor of this approach.


    1. In this post I'm only addressing the issue of ISK injection versus ISK sinking via Incursion payouts. So I'm not touching on the issue of Incursion availability in this post. Perhaps I'll look at combining all these thoughts into one post later.

    2. Also: CCP_Diagoras's stats don't seem to me to show ISK tied up in PLEX already on the market. There's a lot out there, and you don't really need that much ISK to keep churning those buy/sell orders over: especially if you have Margin Trading.