Tuesday, December 20, 2011

Mittens and Markets

I spent a few weeks observing the Goonswarm interdiction of Gallente ice. Ironically dubbed Goonswarm Shrugged by Mittens, chair of the CSM and Beloved Leader of Goonswarm, the interdiction's stated objective was the ruination of the Eve economy.

Now, it would seem a bit far fetched to some, the idea that interdicting a single commodity could bring New Eden's artificial economy to its knees.  However, it must be borne in mind that Mittens had an awful lot of bored Goons wanting occupation as they waited for the Winter Supercapital Nerf.  Like Border Collies, if you don't keep Goons busy they'll start eating the sofa cushions and herding the household cats. Or the other way around. Both are messy and involve constant clean up.

Anyway, you might well ask how I know Mittens wasn't planning on breaking New Eden's economy. The answer is that Mittens told me so. Well, not directly. Well, yes directly, but not in so many words.
All of EVE depends on fuel, and an extra-special amount of EVE depends on Oxygen Isotopes. These are the fuel for the most popular types of supercapitals, the Rorqual industrial ship, and for Gallente towers, which are the backbone of moon mineral reaction chains and thus of T2 production all across EVE.
See, as Mittens put it forward in his mission statement, this means that by systematically griefing Gallente ice harvesting in high sec space, his Goonswarm could bring industrial New Eden to its knees. An obvious lie. Therefore, Mittens did not plan on bringing the economy of New Eden to its knees. QED.

How do I know it was a lie? His lips were moving.

But that aside; the holes in this theory/plan from an economics standpoint are absolutely, unbelievably huge. To announce such a goal Mittens would have to be either made of two parts stupidity to one part hubris, or lying. So ask yourself this: Is Mittens stupid? See? Lying.

Oh, I won't say he doesn't entertain some secret dream of holding all of Eve hostage to his whims. We all need a dream. But there is more of Machiavelli than super villain in Mittens. No, this was an exercise in keeping the kiddies busy while engaging in a little market manipulation.

While it couldn't achieve its stated goal, the announcement of the interdiction by itself would cause oxygen isotope prices to spike due to market speculation by in game traders and the accelerated consumption of the isotopes needed to support the ongoing stockpiling of fuel cells. If the interdiction were successful in causing a production decline in overall oxygen isotope production, that would be bump the expected price spike further. But the impact of the actual interdiction was all gravy. All Mittens had to do was invest in the isotopes up front, announce the interdiction, and then cash in as the price rose. If the scam kept his troops well occupied while they waited for the winter war, all the better.

Of course, Mittens' announced goal of a complete 23/7 shut down of highsec ice production was never realized. I spent a good bit of time moving from one ice belt system to another observing the interdiction in operation, reading reports from sources on the ground and watching the supporting metrics. The effort was generally successful in the few designated staging systems, however enforcement of the interdiction elsewhere became sporadic after the initial excitement with the operation passed. Several systems appear to have been largely untouched after the interdiction's initial push. It wasn't uncommon to sit in a system for hours on end, watching a fleet of happy (if watchful) miners making little icebergs out of big ones - no doubt thanking Mittens for their the additional profit margin.

On Sunday, of course, Mittens called an end to the interdiction. He cashed in his isotopes at a nice profit and sent his goons into Branch to devil the Russians for a time. War against a neighboring nullsec power tends to hold the Goons attention better than war with mining barges.

An interesting byproduct of the venture was the degree to which some the miners worked to adapt to the Goon threat. Normally a miner will simply shut down operations and blue-ball a persistent griefer. In this case, without an expected end to the Goon campaign, and with the uptick in isotope prices making mining Gallente ice worth more risk, miners began experimenting with means of foiling the Goon attacks, or at least minimizing the related financial losses. Further, kill hungry PvE players began to haunt the ice belts in t1 PvP fit ships, waiting for an attacker. Knowing the Goon ships were fit for all gank and no tank and that their focus would be on the mining barges, it was a rare opportunity for the highsec PvE players to rack up some low risk Goonswarm kills.

I won't go into the precise tactics developed by the carebear side. Hulkageddon is just around the corner, and it will be interesting to see if the lessons learned by some of the carebears in the Gallente Ice Interdiction of 2011 get carried over and refined when the Hulk hunters come calling.

As ever, it's an ill wind that blows no one good.


  1. The Mittani is a socialist. He never wastes an opportunity to jab the free market in his columns. This indicates that he has no faith in it, and overestimates his own abilities to destabilize one. (even a fictional one with a computer game currency.. not that there is any difference between EVE and the global finance market with its faux fiat currencies and trading of promised commodities that don't exist, except confidence, but..)

  2. @Lasse- I'll take that as a vote for two parts stupid and one part hubris.

    Actually, a key difference between real markets and Eve markets is the virtual nature of goods in New Eden.

    If, for example, CCP discovered that a dearth of oxygen isotopes was threatening market stability, it would be a simple matter for them to create the needed volume of isotopes out of digital thin air and inject them into the markets via proxy sellers.

  3. "How do I know it was a lie? His lips were moving."
    ROFL!! Nice one, Mord.

  4. First off those bears who you say looked for easy Goonswarm kills would have got them in a noob ship just as easy as in a T1 frig fit for pve... It's high sec ganking the ganking ship is going to die to concord no matter what. All you have to do to get on the mail is shoot it once.

    #2 Yah the interdiction was a way to manipulate the market this is obvs. And I am sure most goons made a good profit, while having a blast killing miners.

    #3 CCP wouldn't have done anything like making iso s out of thin air as that would have been terrible for the game and would have sent the message that eve really isn't a sand box.

    #4 While your post was a entertaining read I do find it hard to believe you really did go out and monitor ice fields for hours on end. If you did then wow man you have to much time to kill.

    Keep up the good posting though and hf

  5. @Allo -

    #1 Actually, the goal of the high-sec gankers is to pop the Goon ship before Concord gets in on the kill mail. Makes it look on the killboards like you beat them in a stand-up fight. However a sharing a kill with Concord is good too for score-keeping purposes.

    #2 It's a win-win. The Goons had fun killing miners. The miners had fun killing Goons. The market speculation made more money for Goons and Miners alike. And the miners will be better prepped for Hulkageddon this year.

    #3 You would never know that CCP injected the commodity into the market. They don't announce such actions and you've no way to tell a CCP proxy seller from a player's market trading alt.

    #4 Let's say I have a very subtle sense of fun ;)

  6. Well, Mord. That's exactly what the Federal Reserve and every other central bank does with currency. I suppose I will agree that EVE differs in every aspect of the market being equally fictitious both in the currency *and* commodity aspect.. However, I compared it specifically to a sector where you trade with your dollars, which are worth nothing aside from your confidence in your government, in things that don't exist and as such only worth your confidence in the broker's promise to provide physical product. Gold futures as an example. At this point they're practically defaulting, refusing to pay out physical. But I digress.. wildly..

  7. #3 You would never know that CCP injected the commodity into the market. They don't announce such actions and you've no way to tell a CCP proxy seller from a player's market trading alt.

    True I can't necessarily spot the CCP trading proxy, but you could tell it happened though by looking at the market. If suddenly a large supply is dumped on the market where previously it hadn't been there. Also, for this to have an impact it would have to be permanent. A sudden permanent uptick in the supply at below market prices....is it proof? No, but when somebody like Goons want to run an interdiction effort there will be an impact on the market. If that impact is suddenly attenuated to keep the markets "stable" then chances are it is CCP.

    But I digress....

    I think it is a valid point Mord over looks. Our currency system works because we have faith in it and our government doesn't muck around too much with it. I think the same applies to Eve. Mess with the market too much and players will change their behaviors, quite possibly to the detriment of the game. This is especially true when one keeps in mind that CCP has portrayed Eve as a sandbox where it takes a very, very hands off approach to the game.

    Reputation effects are not just complete nonsense and I don't think Mord gives them enough credit. After all, our Federal Reserve is more successful because it has built a reputation as being strongly anti-inflation (in normal economic times). In fact, it is so committed to this path it will send the economy into recession to convince actors in the economy that it is serious about keeping inflation low (e.g. the recession in 1980).

    I'm sure CCPs internal economist tells them much of this as well. Don't treat your players as stupid. They love gathering huge amounts of data and then analyzing it. You might think you are doing something undetected or they wont anticipate the effects, but time an again that has not been the case. Look at the Tech moon issue. A player, can't recall the name, gathered a considerably amount of data an noted it would be a bottle neck and the price would go very, very high...after buying up as much as he could at the pre-moon goo change price. Held it for awhile sold it for a tiddy profit. Of course that one was announced. But my point is that there are people out there looking at this data and they are often just as smart if not smarter then the people at CCP.

  8. @Steve -

    Think first. Then type.

    "Our currency system works because we have faith in it and our government doesn't muck around too much with it."

    Upon reading this, the in-house economist at Fiddler's Edge pronounced you "either wildly ignorant or stupid".

    Governments of developed economies "muck around" with their currencies all the time. Frequently. Neigh constantly. Really. Basic finance. See "dirty float" or "managed float".

    Now go to your room. And never, ever comment on markets, finance or economics again.

  9. Oxytopes are still over 1k a month after interdiction ended, so nobody can argue the impact we had on the market.