Monday, August 30, 2010

Nothing Comes Amiss; So Money Comes Withal

I was going to write about interstellar mayhem and space battles of epic scale; or perhaps write a bit of EVE telenovella, featuring manly space men and delectable space piratesses twined together in star-shattering coitus.

But no.

In response to my last post about the goings on in nullsec between Atlas, RUS and Pandemic Legion, Mynxee raised a question about the impact of real money trading (RMT) on the politics and events in nullsec. The question struck something of a chord among followers of The Edge. Emails have arrived with some extensive comments and interesting questions. A response if called for. So, once again I am called upon to hold forth on virtual world economics. 

Thanks a lot Mynxee. 

Now, in order to set up a discussion of RMT as an in-game driver of events, I need to preface a bit about RMT as a phenomenon so we're all on the same page.

RMT is, in essence, the exchange of real world currency for virtual in-game assets. Most people involved in playing EVE or any other popular MMORPG with a virtual economy are familiar with RMT in the form of currency trading. This usually takes the form of a player paying real world currency for in-game currency.

In the case of EVE (as with a number of the larger MMORPGs) the sale of in-game currency on the open market has been forbidden for some time. Players caught so doing can be banned for life from the game. In its current effort to combat RMT (Unholy Rage) , CCP has combined enforcement with partial legalization of currency trading  in the form of PLEX sales. As most readers of Fiddler's Edge know, player may purchase PLEX with real world currency. A PLEX  can then be sold in-game for EVE Interstellar Credits (ISK) and used by the buyer to pay for EVE subscription time.

Despite the best efforts of game developers like CCP, RMT outside of officially sanctioned means persists. In fact, RMT is, at present, a multi-billion dollar business in which some participants make six figure incomes. Given that sort of incentive, and with no real-world consequences if caught breaking the rules, RMT is proving exceptionally hard to control.

The currency trading manifestation of RMT drives a lot of activities that make EVE less fun for the recreational player. Macro mining or missioning, running mining or missioning ships 23/7 using programmed routines, generates a lot of isk for the person running the Macros to trade for real-world cash, but depletes in-game resources and depresses the financial rewards for recreational players.    

But, isk is only one in-game asset that can be exchanged for real cash. Characters are routinely bought and sold via a number of outlets. In countries where labor is cheap, character farms, where rooms of players work long hours grinding missions and training up characters for sale, are common. The same is true of of any purchasable asset in game - from spaceships to POS to space stations to systems to entire regions.

Anything that can be possessed by an EVE character, including the EVE character, can be purchased for real money. And all such activities count as RMT. And in this context, RMT can devalue in-game currency and interfere with in-game market mechanics. Scarce items, such as Titans become scarcer still if the preferred buyer is someone paying Euros rather than isk, driving their price in isk upwards, and drawing more players into the RMT black market.

But wait, there's more.

The sale of services is a part of any country's gross domestic product (GDP). In other words, services are an asset that can be bought or sold. As with real economies, so to with virtual economies. In addition to EVE things, an EVE player's services can be bought for real money.

Think about that for a second:

Lets say you're a really, really good fleet commander - a very Napoleon of New Eden.  Everybody wants you to join their nullsec alliance and lead their fleets to victory.  You're getting offers from everywhere offering you all sorts of in-game goodies to get you to join up. And then someone contacts you, offering you $1000 a month to be one of their fleet commanders. $1000, just for playing a game you already love. And if you're the right kind of player, that sort of money might relieve you of the need to keep a real world job. Your job? EVE Fleet Commander. You can stay online all day long, planning and directing operations while your competition, the poor slobs, can't log on until their work day is over.

The same holds true of any profession in EVE (CEO, Directors of Industry, Spy) where a highly skilled player, free to operate on a professional rather than recreational basis, gives his corporation or alliance a profound edge over the non-professional competition.

Finally, lets talk bribery.

Bribery is no stranger to New Eden. Isk and other in-game assets are often used to bribe other players. If I offer an alliance director 10 billion isk to attack my enemy, he might be tempted. However, if I happen to know that the director in question is a 16 year-old with limited access to cash, or forty year-old guy who can't hold down a job, offering five hundred dollars is going to be a lot more tempting.

Unlike isk, or ships or other virtual bribes, that five hundred dollars has instant utility in the real world.  And, while CCP will allow me to change real money into isk, there is no way for me to legitimately transform isk into dollars or Euros without risk of being caught. The offer of real money addresses the bribe target's real life needs of the bribe target without leaving in-game footprints.

Given its advantages, and without an effective means of detection and sanction, real world money must be finding its way to New Eden. Therefore, it's reasonable to assume RMT is influencing EVE to some extent.

The question is, how much?

Is the influence of RMT on EVE marginal - mere playing around the edges? Is RMT a cancer eating away at the game we love? Or, is RMT a tool in the hands of a malevolent group of so-called "players" - a New EVE Order threatening to turn EVE into a money mill for a few at the expense of the EVE community at large.

We'll take that up next time.

Thursday, August 26, 2010

Paradigm Shift

One of the reasons for the exceedingly high casualties in the American Civil War was that long-held tactics, that were based on the short range poor and accuracy of smooth-bore muskets, came up against the common use of the .58 caliber rifled musket by troops of the day.

It took a long time for both sides to figure out that many tactics that had been chapter and verse, drilled into generations of officers since the the American Revolution, were now recipes for military disaster.

Throughout the history of war, the side that first recognized and adapted to changes in the military paradigm met with success. Those who did not recognize or adapt to change, and insisted on fighting the old fight rather than adapting to the new fight, generally ended up holding a big bag of failure at the end of hostilities.

Atlas Alliance may be reprising that old song.

Recently, Atlas space in Insmother was under attack by Legion of xXDEATHXx, Red Alliance, White Noise (aka the Russian Coalition, or RUS). Pandemic Legion, had been hired by RUS to support the invasion.

Atlas was successful in holding or repulsing the initial attacks, holding down a key system in C-J6MT and making effective use of cap ships against the massed forces of RUS/PL. After a number of failures to loosen the Atlas grip on the system, a new tactic was devised that leveraged the Dominion sovereignty rules. Rather than continuing to batter against C-J6MT with their entire force, PL engaged the main Atlas fleet, pinning it in place while the RUS fleets began to attack the systems around C-J6MT. 

In the old days, Atlas could have deployed a small force with lots of POS to delay the enemy in peripheral systems while defending the main system. Grinding down the defending POS would have been time consuming and ship intensive for the invaders, giving Atlas elbow room to respond. With Dominion era rules, however, an alliance must actively defend systems, or quickly lose them. To do so, an alliance have have the numbers, mobility and command structure necessary to effectively meet the enemy in multiple locations at once.

Atlas didn't adapt immediately to the change in tactics, and was unable to respond to PL/RUS attacks on the surrounding systems. There is some indication that Atlas was reluctant to move due to concerns about lag as a risk to its Cap fleet. Assuming lag was a factor for both sides, the invading RUS/PL force put Atlas into a position where countering RUS attacks would have had Atlas fighting when lag was to its disadvantage.

RUS/PL took advantage of Atlas' concentration in C-J6MT and launched a major assault on Atlas' Detorid stronghold of 0-W778. Significant parts of the Atlas fleet appears to have left C-J6MT in an effort to lift the siege of 0-W778. Entering the system, the Atlas fleet was unable to lift the siege. Some elements of the fleet retreated from the system, however, a large number of ships were boxed in station.

Against All Authorities is reported to have sent some assistance to aid Atlas, however it was not sufficient to turn the tide. The RUS/PL success may have transpired too rapidly for AAA and Atlas to realize the danger until it was too late.  

From what I can gather, Atlas is presently pulling back to establish a defensible frontier, and attempting to stage a break out of the ships that remain camped in 0-W778.

With Atlas regrouping in Omis, RUS and PL appear to be mopping up in Insmother and Detorid. RUS/PL are presently locking down the entry/exit points to the South-East quadrant of Insmother, effectively boxing in the large cluster of Atlas systems there.

As of this writing PL is attacking 46DP in Teneferis, the last remaining entry-point to Insmother in that quadrant.

Despite claims by opponents of an Atlas collapse, Atlas numbers have remained remarkably stable despite this setback. There has been a very slight down-tick of numbers in the last few days, but nothing that would indicate an imminent Failscade.

Now all eyes turn to AAA and, the elephant in the room, IT Alliance. Rumors abound as to whether IT will aid AAA and Atlas, attack them, or simply stand pat.

In the meantime AAA and Atlas will be digesting the lessons recently served up. Despite their success, RUS needs to be wary. The change in Sovereignty rules is a door that swings both ways. RUS is very overextended at the moment. It has long supply lines and an awful lot of territory to digest. Atlas and AAA, with shorter interior lines of movement and supply, may be able to turn the tables on RUS and leverage superior mobility to their advantage.

And then there's the CareBear factor.

Recall in Rise of the CareBears (Part Deux) I said that AAA's careful cultivation of renters have left it sitting on a very big pile of cash. Recall also that PL was hired by RUS.  RUS will have spent a lot of resources on this little fracas and may not have the ready cash needed to outbid AAA for PL's services if push comes to shove. That would allow AAA to eliminate, and possibly recruit, a significant part of the RUS invasion force without firing a shot. An overextended RUS, facing Atlas and AAA along with PL would be in a very tight spot.

And then there are the bears themselves.  As a renter alliance, AAA Citizens doesn't get a great deal of respect from their PVPing neighbors. However, they have invested heavily in their space. They call it home. And they are a tougher breed of bear than those the griefers hunt for sport in empire. Many of the AAAC corporations have a significant PVP-capable element. Even if they can't punch in the weight class of a Pandemic Legion or IT Alliance, they represent a sizable body of experienced nullsec PVP pilots. Properly organized and deployed, their number will make themselves felt. The major alliances would be foolish to dismiss them.

When the Japanese assembled a modern army after the Meji Restoration, they recruited most of their soldiers from the peasant class. The samurai had a good laugh over that. Then the peasants killed them.

Funny things, paradigm shifts.

Monday, August 23, 2010

EVE Blog Banter #20: Pirates and Griefers

Welcome to the twentieth installment of the EVE Blog Banter, the monthly EVE Online blogging extravaganza created by CrazyKinux. The EVE Blog Banter involves an enthusiastic group of gaming bloggers, a common topic within the realm of EVE Online, and a week to post articles pertaining to the said topic. The resulting articles can either be short or quite extensive, either funny or dead serious, but are always a great fun to read! Any questions about the EVE Blog Banter should be directed to Check out other EVE Blog Banter articles at the bottom of this post!
With the recent completion of the 3rd installment of Hulkageddon last month, @CyberinEVE, author of Hands Off, My Loots! asks: “Griefing is a very big part of EVE. Ninja Salvaging, Suicide Ganking, Trolling, and Scamming are all a very large part of the game. What do you think about all these things? You can talk about one, or all…but just let us know your overall opinion on Griefing, and any recommendations you may have to change it if you think it’s needed.”

Mynxee has given up on the life respectable and is returning to her criminal roots.  Her return to piracy has been generally hailed as a good thing.

I agree.

I’m not a pirate, but if I’m going to be a victim of piracy I want to be robbed with a bit of √©lan and a cheerful approach to thievery. I mean, if you’re going to steal from me, at least make it interesting.

Nobody likes being ripped-off by the mouth-breathing 7th graders who appear to do NOTHING but camp outside stations in Jita, Amarr et al and wait for targets to emerge. I assume these players are Junior High students off school for the Summer, because anyone with a fully developed frontal cortex would shoot themselves after about 12 hours of that action.

Despite their differing approaches, both Mynxee and the aforementioned mouth-breathers are in the same business. They are both members of the piratical profession. They are colleagues, if you will. They are two peas from the same pod; co-equals in the ancient brotherhood of galactic larceny.

I get pirates.

Piracy is an ancient and storied profession.  They play, fight and steal in the shadows of giants like Jean Lafitte, Edward Teach, Henry Morgan, Francis Drake and Johnny Depp. The pirate’s primary motivation is financial. It’s about the loots – the big score – with some excitement and adventure thrown in.

The griefer is another matter.

Now, when I say griefers, I don’t mean pirates. Neither do I mean the mouth-breathers outside Jita, ninja salvagers, scammers or lowsec campers. They are minor pests who cause annoyance to all players alike. Nor do I mean anyone operating in nullsec – griefers tend to rely on empire game mechanics to hide from a stand-up fight. Once they enter nullsec, a griefer’s just another neutral to be podded.

When I say griefers, I mean “true” griefers; the lads flying solo or in griefer corps (aka “High Sec Wardec Corporations”) whose sole purpose is to attack weak highsec players and corporations. Beyond buffing their PVP stats, their only purpose is to abuse and bully with little or no risk to themselves.

A true griefer’s primary motivation is pleasure derived from inflicting pain. Griefing is about putting a hurting on someone who can’t defend themselves. They stand in the shadows of the schoolyard bully and the kid who loved pulling the wings off flies and staking the bodies of dead animals out in his back yard. 

The hallmark of the hard-core griefer is his/her abnormal lack of empathy displayed alongside strongly amoral conduct.  In real life such behavior, combined with the ability to mask the behavior and appear outwardly normal, is called Antisocial Personality Disorder.

Yeah. You heard me. The true griefer is a psychopath.

The anonymity of EVE combined with game mechanics relieves the griefer of the need to hide his/her behavior. That same anonymity distances the griefer from his/her victims; reducing the possibility of empathy.  Finally, the virtual nature of EVE makes it easy to rationalize the griefer’s actions.

After all, it’s just a game. It’s pixels. Nobody actually gets hurt, right?

For good or for ill, the griefer is part of the fabric of New Eden. Most players tolerate them. A lot of players celebrate them.

For myself, I don't much like bullies - digital or analog. I put hard-core griefers on the social scale somewhere between cyberstalkers and refrigerator mold. I can’t help but wonder how they treat their friends and families when they’re logged off.

Sure hope one’s not living next door to you.

 Other Blogs in Banter #20:

A Merry Life and A Short One - Logical Fallacy
Diary of A Pod Pilot - Griefing, Not just for the Tears
Venom's Bite - A Very Simple Proposal
Where The Frack Is My Ship - Think Like a Capsuleer
mikeazariah - Blaming the Victim 
Freebooted - Dear God, Please Kill Them All 
Planet Risk - Griefing in EVE

Friday, August 20, 2010


I was thinking about Incarna the other day.
For those of you living on Mars, Incarna is one of CCPs upcoming innovations that will allow EVE players to leave their ships and wander around station. Word is you'll be able to start all manner of station-side businesses "from plastic surgeons to fashion outlets", adding yet another dimension to the EVE economy. 

One feature that has my daughter very excited is the fashion potential. It seems EVE is hiring fashion designers to create clothes for the Avatars.

Yes, apparently you will be able to dress your EVE in-station avatars.

So, what happens when Project Runway meets the EVE sandbox?

Well. Anything's possible....


I was in empire when the message called us home. It came through the encrypted priority channel with a red tell-tale flashing next to it. Terse.

All personnel return to base.

Nothing more than that. I dropped the cans I was hauling off in Oursulaert, left the blockade runner Fiddler's Way in dock and blew out of system in a cheap Atron frigate fitted for speed. Security protocals dictated radio silence. I worked my way through empire and ran the lowsec gauntlet with no idea what would greet me when I got to HQ. At the entry point to nullsec, I slipped a pirate blockade and took a shortcut through a hostile space to get to our home station.

When I finally jumped in-system, everything was was quiet. No sign of invasion or recent fleet fights. I thumbed through the scan indices. All the POS were in place. No wrecks. No chatter on the intel channel.


I pointed the little ship toward system center and headed for station.

May Station is a quiet little backwater. Not much to look at. Humble, as outposts go. It's comfortable, though. Has what I need. It's home.

Home had apparently changed while I was away.

Instead of the usual dreary dockside with the smell of machine oil, the grind of can loaders and the thump-hiss of the air circulators I emerged from the docking gangway to the sound of gentle, soothing music. The air smelled clean, touched with the the faintest scent of spices. The dockside brothels gin-joints were gone and in their place were quaint, tasteful storefronts. One offered t-shirts with slogans like "I Brake for Viators". Another sold bath linens and exotic soaps. A third specialized in Caldari pottery.

Something was wrong here. Very, very wrong. I checked the loads in my sidearm and loosened it in its holster. Then I headed for Bingo's.

Bingo's is the regular haunt and unofficial headquarters for my corporation. If the gang was in-system, that was where they'd be. I arrived at the door and, at least here, everything seemed normal. I pushed through the door, prepared for the worst.

And I found it. Instead of the murmer of conversation and the wobble of music from Bingo's ancient juke box, I was assaulted by the WHOOM-PA WHOOM-PA WHOOM-PA of a driving dance-music bass line. Bingo's smokey ambiance was gone, replaced by pulsing lights reflected off mirrors and glitter.

The dance floor was jammed, bodies clad in exotic clothing writhing to the music. Every table was packed with people and all the people were turned out to the nines. The clothing, the hair styles, the all looked like vid streams out of empire of Jita high society.


At a table on the other side of the dance floor some glitterati chick jumped up, waved at me and called my name. I took a closer look at her, and then at her companions. All three of them waved and beckoned me over to their table. I blinked twice, then crossed the dance floor.

"Lir," I said as I joined them. "Vae, Orchid,"  I nodded at each of the three women, all members of my corporation. I paused a moment, searching for words.

"You look...," I hesitated.

"Incarna," laughed Vae. "We look Incarna; which is to say totally fabulous!"

And so they were. Each of them were dressed in the sort of outfits you only see in magazines - on vid stream starlets. The cloth was obviously of fine quality and very very sheer, leaving just the right amount to the imagination. How the clothing stayed on their bodies was left to mystery. Their makeup was impeccable and their hair was coiffed in a way that was positively gravity defying.

"Uh, where to you hide your sidearms?" I asked.

"Don't," said Vae. "Spoils the drape of the fabric."

"The Incarna upgrades hit station just after you left," said Lir.

"You mean all this," I gestured at the club once known as Bingo's. "And the changes at dockside...?"

"Incarna!" They all called out together, then burst into fits of laughter.

"So," I said. "Kento called me back from halfway across known space just to see some station upgrades and get all funky and shit?" I was sleep deprived and addled from the long trip and I could feel the anger rising in me.

"No, no!" said Lir. She paused a moment and sipped from a very tall, very fruity drink.

"Kento's going to take the corporation in a whole new direction," she continued. "He's pulled everybody back in for re-orientation."

"Re-orientation? New Direction?"

"Yeah," said Orchid. "We're going total Incarna."

"Total Incarna," I repeated. "I have no idea what that even means."

"Kento will explain," Vae chimed in. "It's all the brainchild of our new director of R&D."

"We have a new R&D Director?"

"That's right, you haven't met Aldo!" Vae exclaimed. "Hold on a minute!"

All three of them turned to the dance floor. Cupping their hands, they all howled in unison.


At that a short, dark figure dancing with three statuesque Khanid red-heads turned and looked at us. He stopped dancing, waved away his partners and approached the table.

Aldo was a somewhat rotund Gallentean. He had a broad face that sported an large pair of old-fashioned spectacles. His dark hair was receding, but expertly styled to make it look more a fashion statement than an accident of genetics. He wore a scarlet jacket jodhpurs and tall riding boots, all reminiscent of ancient hunting clothing. His boots sported little sliver spurs and he carried a silver chased riding crop, as though the last horse in all New Eden hadn't died a millennium ago.

He swanned across the floor to our table. Vae, Lir and Orchid rose to meet him and the three of them exchanged air kisses with him.

"Now," He said, turning to me, "Who is this dowdy bird?"

I mustered up a smile and extended my hand.

"Mord Fiddle," I said.

He ignored the offered handshake and looked me up and down

"Nononono," he tutted, tapping his lower lip with his riding crop. "This simply will not do!"

"Lirael darling," he said, waving a hand in her direction. "Tell him. Tell him it will not do""

Lir raised a sympathetic eyebrow at me, "It will not do," she said.

"There!" Aldo crowed, waving his arms in triumph. "You see? It. Will. Not. Do."

"What?" I asked, feeling my face redden with anger. "Exactly what won't do."

He tittered a bit, covering his mouth with the fingertips on one hand while gesturing at me with the other.

"This...thing. This garment. This...Oh, what is called? Vaeline, my sweet. What is the word? Ah! It is so hideous my mind refuses to recall the name for this...this...."

I looked down.

"My coverall?"

"Coverall!!" he cried. "Yes! It's a horrible word. It's a horrable name. But so true to the dreary nature of the garment. Look. So utilitarian."

""U-t-i-l-t-a-r-i-a-n," He repeated the word, drawing it out for emphasis. "It covers you up, but this is all. Meh! I say meh to your coverall. It is a fashion catastrophy."

"It's not supposed to look good...." I began.

"And is very successful at so doing. One would swear your coverall was made for the sole purpose of improving the self esteem of other clothing."

I ground my teeth and felt a low growl begin in the back of my throat as I reached for my sidearm. Vae anticipated the move, stepped toward me and dropped her hand over mine before I could draw my gun from the holster.

"C'mon Mord," she said in a low voice. "Aldo can get on the nerves, but we're lucky to have him. His fashion Industry skills are maxed out. He can even work with Intaki crinoline. The guy's a rock star when it comes to clothing."

I took a deep breath and nodded at Vae. She gave me a tight smile and stepped back. I turned to Aldo, who'd watched the exchange with his over-bright eyes.

"Well," I said, "I suppose there's nothing wrong with having a little flash to wear in station."

"For station?" He cried. "No, no,no! Fashion is not just for station! What, you think looking fabulous is only for getting sloppy drunk on dockside? For finding a lady capsuleer and making the jiggidy-jiggidy?"

"Hey, I don't...." I began.

"Fashion is living. Fashion is breathing," Aldo said, executing a little pirouette.

"Life is an occasion," he said. "You must always look your best - even crawling through synthetic oil in the engine room. One can be fashionable even in battle. You may die in agony, but you will do so knowing that, while you may not be the better man, you are the better dressed man."

"Now," he said, whipping out a pad and stylus, "How much closet space on your ship?"

"Closet space?" I said, "It's a combat ship. There's a locker, but no closet."

"Ahhhh!" he cried out, covering his ears with his hands and stamping his feet. "This I cannot hear. This is too much." He stopped and and poked me in the chest with his riding crop.

"You," he said quietly. "Are a Philistine."

"Because my combat ship is short on closet space?"

"Yes," Aldo said, as he began tapping data into the pad. "But don't worry, it isn't your fault. It is a new world, yes? The age of Incarna. We must all adapt. Not to worry, though, I have just the thing for you. There!"

He thrust the pad toward me. I peered at it.

"Ship specs?"

"Yes!" beamed Aldo "A fashion upgrade for your strategic cruiser. It adds a 10,000 m3 walk-in closet. And with these rigs you can install a motorized hanger rail system and on-board dry-cleaning"

"But you've ripped out the defensive subsystems," I pointed out.

"I know!" He clapped his hands gleefully. "It's totally lock and load, baby!"

"Mord!" called a booming voice from behind me.

I turned to see Kento, our corporate exec crossing the dance floor toward me.

"Welcome back. I see you've met Aldo."

"Eh, Kento," I said, "Are you wearing spats?"
"I know!" Kento smiled proudly at Aldo. "The man's a visionary, isn't he. We're completely regearing the corporation to leverage the Incarna upgrades. I've got all the Industrial command ships in dry-dock. We're ripping out the maintenance bays and installing tech 2 fabric mills and on-board tailoring shops."

"But the mining ops," I stammered.

"Mining?" Kento wrinkled his nose and waved his hand in dismissal. "Dirty business mining." He tugged at his cuffs and his diamond cufflinks twinkled in the club's pulsing light.

"No Mord," he said throwing an arm over my shoulder. "It's a brave new world. Yesterday's battles were fought with lasers and rail-guns. From now on, it's needles and thread, and may the best-dressed win. Strategic cruisers? Bah! Jovian silks and Sleeper synthetics; that's the next frontier in T3 technologies. "

He took Aldo's pad from my hand and held it up where we could see the fashion-augmented Proteus.

"That," he said. "Is our future. Tomorrow's battlefield isn't the spacelanes, but the fashion runway and the glossy pages of Vogue New Eden. Can you imagine it, Mord? Can you see the future?"

And to my horror, I could.

Monday, August 16, 2010

Adam Smith - Capsuleer

"I'd rather be lucky than good."  -  Lefty Gomez
Jenny, on the Hunt
I had to send Jenny, my research librarian, to look for my copy of Adam Smith's The Wealth of Nations. Today, were going to talk economics and the cost of doing business post Planetary Interaction (PI).

Everybody strap in, it's going to be a bumpy ride. 

Blake, author of the K162space blog wrote this week about the billions he's made speculating on the PI commodity market.

He writes:
I bought a lot of Mechanical Parts at NPC prices, 646.00 ISK, before Tyrannis hit the shelves and have made a killing on this poorly implemented expansion.

I read the dev blogs, Akita T’s posts, and played around with extraction rates on the test server. All my Excel sheets showed Mechanical Parts costing around 8,700 ISK to make. Once the actual Jita price hit that level, I dumped my stock.
Now, while it's true that certain P2 commodities have gone through the roof (for the moment), I take issue with his assertion that this happened because the manufacturing costs of those items is too high. Blake's Excel sheets are, I believe, simply wrong.

Here's why:

Advanced Command Center
Once online, a facility based on an Advanced PI Command Center can manufacture about 300 units of Mechanical Parts per day. This assumes the same PI facility is extracting the raw materials, and producing the reactive and precious metal inputs to Mechanical Parts as well as the P2 Mechanical Parts themselves. Output will vary depending on the precise set-up, but for our purposes let's hold to that 300 per day.    

The price of Mechanical Parts will be the cost of the facility divided by the total number of units produced over time, plus export charges. Once the facility investment is paid off, the cost of production is reduced to the export charges.

The cost for the above facility is a bit less than 6.5 million. At 300 units per day, it will take 33.4 days to produce the 10,000 units of Mechanical Parts needed to drive my per-unit manufacturing costs down to roughly 650 isk - about the cost at which Blake bought his pre-PI inventory. As production continues, the per unit cost asymptotically approaches zero.

So, over a fairly short period of time, manufacturing costs for Mechanical Parts will drop significantly below the $8,700 anticipated by Blake. Selling the inventory well below Blake's sell point will repay the initial facility investment very quickly (10 days assuming an average price of 2,200 ISK per unit), after which it's pure profit minus trivial export fees. 

"But Mord," you ask, "If Coolant, Mechanical Parts and such are so cheap to make, why has their price gone up? Why is Blake hauling in all those iskies?"

Well, I'm glad you asked.

See, before PI, all PI products were price controlled. They entered the market from NPC stations at a fixed price. All across New Eden, the same Mechanical Part, or Caldari Control Tower could be gotten at the appropriate NPC stations for the same price. You could buy them and sell them elsewhere, but that amounted to playing around the margins of the controlled price.

If you sold for less, you were losing money. If you sold for more, you had to compete with the controlled NPC price. On top of that, NPC sellers had a nearly infinite reserve of inventory to sell, which restricted the influence of supply in PI product cost.

When PI price controls were removed, the market reacted.

In many cases there was a sudden spike in price while player PI production moved to fill the gap left by the removal of NPC inventory from the market. Mobile Labs, for example, jumped quickly from their fixed price of 90 million to 110 million ISK when PI was introduced.

POS fuels like Machine Parts, however, are inexpensive commodities. Players tend to stockpile them, especially when supply may be uncertain. When you have an inventory cushion like this in place, you're price-elastic; if you don't like the market price, you can wait around for a better price to come along.

But, when the POS start crying for Mechanical Parts and the POS fuel hanger is empty, you become price-inelastic. You can't wait. You've got to buy at the going market rate if you want to keep your labs, harvesters and refineries on-line.

Meanwhile, the inventory of P2 POS fuels hadn't fully recovered.

Most produced units never see the market. They are used as inputs to P3 products, or produced by POS owners who consume their own product and bank up any the surplus for future use. Some nullsec alliances, in a bid to be independent from empire, forbid the export of PI products from their spheres of influence. All of this conspired to create a scarcity of supply.

Demand went up. Supply did not. Prices rose. Some players started buying up available inventory in order to protect themselves against future price increases. Traders bought and held inventory in order to sell against higher prices in the future. All this drove prices up further. Wash, rinse, repeat.

This is called a market bubble.

However, before you rush out and start stocking up on P2 POS fuels, bear this in mind: Buy low. Sell high. 

As I explained above, the price of a Mechanical Part is way out of line with that the manufacture cost of that part.

If the price is high and the cost of manufacture is low, it's almost a sure thing that prices will go down. High prices draw new producers into the market. The prospect of getting even 8000 ISK per unit for an item that costs next to nothing to manufacture is going to tick up production pretty quick. Inventory is going to go up as all those CareBears go for their piece of the pie. Next thing you know, we'll be in a race for the bottom.

You want 8,000 ISK for your Mechanical Parts? I can still make a killing at 4,000. Oh, you're selling for 4,000? I can undersell you at 3,000 and still make a cool profit. Next thing you know, the guy who speculated at 6,000 per unit is dumping his inventory on the market at 2,500 so he doesn't lose his whole investment.

So, why hasn't this happened already? I suspect the cool factor - a market influence particularly powerful in EVE.

See, Mechanical Parts are boring. They're a commodity. Players want to build sexy stuff; ships, labs and jump bridges.

Because of the 'cool' factor, Mobile Laboratories dropped very quickly from that 110 million ISK high to their current 48 million. Advanced Mobile Laboratories that sold for 150 million at NPC prices can be gotten for 70 million. A Caldari Control Tower that would have cost you 350 million pre-PI can be had for under 195 million now that players are building them. If everybody wants to build a thing its price is going to come down.

And trust me, there's nothing like an obscenely high profit margin to make a thing cool.

So. If Blake's spreadsheets were wrong, how did he make all that money speculating on Mechanical Parts?

In a word; luck.

And I don't say that to dismiss Blake's accomplishment. In markets, luck is as important as smarts. There are a lot of Wall Street traders who'd rather be lucky than good. I know a couple of guys in EVE who bought up every control tower they could afford. Their own spread sheets that showed tower prices were going to go through the roof. It was a can't-miss opportunity. However, most of them got burned when the cool factor made mock of their spreadsheets.

In his blog opening Blake says the Tyrannis PI implementation was flawed. I don't think that's the case, except insofar as EVE's markets behaved the same messy way as markets in Real Life do. Yeah, I could complain that Mechanical Parts shouldn't be so expensive. but then I'd have to complain that Caldari Control Towers are too cheap.

The market winds blow good to one and bad to another - 'like the very rain of heaven, upon the just and the unjust alike'. Just another day in the EVE  sandbox. 

Thursday, August 12, 2010

Rise of the CareBears (Part Deux)

There's a lot of material to cover, so Fiddler's Edge is going to have to revert to "Wall of Text" mode to get it all in.

This has upset Jenny, my research librarian, who's been enjoying her role as blog cover-girl.

"Sexy Librarians are the front line in the war on ignorance," She pouted. "I have a duty to my public."

She kicked off her shoes and reclined invitingly on my desk.

"Now get the camera," she demanded.
I sighed and moved my inkwell out of harms way.

"Twelve fan mails are not a 'public'," I told her. "Now button your blouse and go find my copy of Bright's Old English Grammar and Reader."

She rolled her eyes and slid off my desk.  

"Fine,"  she huffed as she stepped into her shoes on and stormed back to the library. "Go ahead. Just single-handedly blow out the candle of enlightenment."

The door slammed behind her.

Now, where were we?

As I've written in posts like Subinfudation and Taste the Rainbow, one of the big changes CCP put into the Dominion sovereignty mechanics was to add a cost component to holding nullsec systems. When you hold sovereignty over a system the sov bill comes due every 14 days. If you're holding a system that's not of strategic value and not being used to generate income, then you're losing money and getting little but bragging rights in return.

The smart alliance gets those systems to pay for themselves and turn a tidy profit on the side. And that means PVE.

Now, a lot of lean, mean PVP alliances don't have a deep bench when it comes to industrial skills and so can't properly exploit the systems in their sphere of influence. Such alliances are often reluctant to recruit PVE Corporations due to worry about "CareBear rot".  After all, balancing the interests of PVP and PVE factions within a single corporation or alliance is a non-trivial problem. So, a number of PVP alliances have been actively recruiting indy corporations into renter alliances that operate within the PVP alliance's sphere of influence.

These are often "turn-key" operations in which the bears pay for the right to claim sov and run the show themselves. They work away adding improvements to "their" system and merrily building useful things like ships, structures (thanks to PI) and sundry materials of war. The landlord collects the fees and is spared being harassed by CareBears every time the station toilets back up.

Now, one of the reasons CCP changed the sovereignty rules was to make the industrialist more central to life in null-sec space; to coax some of the CareBear population out of high-sec and add a new dynamic to nullsec. In this they've been successful. With the exception of Providence, the population of nullsec regions took a notable upward turn in the first quarter of 2010.

But the CareBears brought something to nullsec with them, and it's influence is just beginning to be felt:

They brought money. Lots of Money. Lots and lots of money.

Indications are that a lot of money is being made and certain PVP alliances are building up unprecedented (i.e., obscenely large) cash reserves. We're talking the sort of cash reserves that can buy a lot of influence, a lot of capital ships, and finance very, very long campaigns. All things being equal, a PVP alliance with vast financial reserves has the edge over an alliance that doesn't. Even if things aren't equal, money is a great equalizer. Deep pockets can off-set disadvantages in other areas.

There's some talk that such alliances, fattened up by eating too much CareBear honey, are no longer in shape for real PVP, that they'll collapse at the first whiff of cordite. Maybe. Some will. Some won't.  A lot of that talk seems to be wishful thinking - whistling in the dark of an oncoming storm.

No, I think we're witnessing the beginning of a financial arms race - were fiscal savvy will decide the winners. Look for high quality CareBear corporations to become a much sought after commodity in nullsec. Professional, well-run corporations will be able to take their business anywhere, and will be able to negotiate attractive terms with landlords whose systems they occupy.   

In my experience nullsec changes some CareBears. They become a different breed than their high-sec cousins. Tougher. More efficient. More wily. More ruthless. Far richer. The best of them will become the great merchant princes of New Eden.

And PVPers will work for them.

Monday, August 9, 2010

Rise of the Carebears

I've been doing this all wrong.

Apparently, all y'all are living the Life Digital while Fiddler's Edge is mired in analog. You're into the social media - texting, twittering, podcasting, FaceBooking et al. The Edge, with its "wall of text" doesn't dazzle, doesn't compete for the jaded eye of the media-soaked online gamer.

It seems I'm sending invites to high tea in a world of rave parties.

See, I've assumed you read the Edge for its thoughtful analysis, daring prose, deep insights, and its tendency to use words not writ nor spoken conversationally since Middle English went out of fashion.

I respect my  readers.

....I'm sorry, what were we talking about?

Oh yes! CareBears.
No, These Are Not EVE Care Bears

No, not Care Bears on Fire. That's some girl-punk indy band. And no, I haven't heard their last CD.

No, I speak of CareBear in the EVE eauve.

Now, CareBear is one of those context-driven words. There's an awful lot of drift to exactly what a CareBear is. To some it's the player who hugs highsec, refusing to participate in any pvp and demanding all griefing and piracy be forbidden in empire space.

On the other end of the spectrum, there's the opinion of the hardened PVPer; that anyone doing anything that does not involve blowing up other players, is a CareBear. Doesn't matter whether you live in nullsec and PVP when you're not mining or building ships and mods. The fact that you're spending valuable game time not podding someone makes you a CareBear, and therefore a lower form of life in the EVE universe.

Now there's nothing new about this point of view. The warrior class has often taken a very dim view of the merchant/artisan class.
Edo Era Wood Cut Print

In Tokugawa Japan, the merchant class was at the very bottom of the caste system - below even the farmers. They were a necessary evil required for the support of the Samurai – after all, the fine silks, ceramics and other niceties of life for a cultured warrior class had to come from somewhere. However, merchants were discouraged from thinking too much of themselves and their dirty money by the fact that Yojimbo could cut off their heads on a whim if the merchants got uppity.
A Medieval Peasant

In medieval Europe, peasants were effectively tied to the patch of dirt on which they were born; they were part of a their lord’s domain and their labor supported said lord. Needless to say, such lords took a dim view of their labor force leaving the pig sty or barley field and running off to practice a little private enterprise in the city. Once a European merchant class did arise, the nobility made sure that the levers of political and military power were reserved for the noble born.

Trouble is, warrior class becomes dependent upon a lively economy. Sooner or later the people driving the economy can't be held down. Push comes to shove and, next thing you know, there's a Meji Resoration or an English Civil War.

When the dust settles, the warrior class finds itself working for the industrialists and money-men.

Now, all of this has happened before. All of this will happen again. In fact, it's beginning to happen now.

In New Eden.

Tune in next time, and I'll tell you why.

If you don't my research librarian will be very disappointed in you.

Wednesday, August 4, 2010

Object Lessons

A number of folks have contacted me to ask why I tend to write about the dust-ups in Providence without covering the larger alliance and coalition goings-on. In essence; why am I writing about band that opens for the Stones when everybody wants to read about Mick Jaggar?

I began writing about Providence as a service to some friends who were outside the normal intel channels and wanted to know what was going on during the Great Eviction without having to sift through fifty different sources to get the story. I've continued to write about it because a) it contains great object lessons for metagaming and b) it's been a compelling drama.

Where the Providence chips fall is no never mind to me. It's how and why the chips fall that gets my attention. 

Speaking of which, the Providence chips appear to be settling back into place.

The Great U'K Purge turned out not to be fatal to U'K and the New Providence Holders (NPH). Ushra'Khan (U'K) members found temporary refuge with Circle of Two (CO2) and have since reconstituted themselves as Damu'Khonde (D'K). They are reported to have regained administrative control of the old U'K and plan to transfer its systems and assets over to the new alliance. As of this writing, D'K and the rest of the NPH appear to be firmly in control of the region.

It was Agony that finally dealt with the Razor Alliance armored HAC fleet that had been twisting the collective tail of the NPH. Over the weekend the Razor fleet located a small Agony battleship fleet gathering at a gate. Following their usual practice, the armored HACs warped in and engaged the Agony fleet at close range.

 Then Agony sprung the trap.

Interdiction spheres went up around the two fleets, holding the Razor HACS in place. The battleship fleet turned out to be fitted with smart-bombs which, given the extreme close range of the HAC fleet, negated their speed advantage. Unable to warp out, the Razor HAC fleet was eviscerated in short order.

Curatores Veritatis Alliance's (CVA) inability to exploit the Great U’K Purge to their advantage has left them weaker than before the Purge.

They have lost X-R3NM, their last remaining nullsec station to Atlas. Meanwhile, their remaining six Providence systems are scattered about the region and CVA’s in name only as they are unsafe for CVA to exploit. They remain a cost center, eating up CVA revenues for little, if any, return.

Genco Corporation, unable to convince CVA leadership to change direction and halt the downward spiral, has left the alliance. They remain “allies” with CVA, however Genco's plans include relocating elsewhere, so this likely means little more than a non-aggression pact. CVA’s numbers continue their decline and, without X-R3NM as safe harbor, their ability to recruit experienced PVPers is further diminished.

In effect, CVA is now a lowsec alliance.

So, what are the object lessons we can take away from all this?

1) Friends are important:

As I wrote in Barbarians at the Gate, the Dominion sovereignty rules make taking and defending systems a much more dynamic, more life-like, activity. An alliance’s relationship with others has a direct impact this facet of the EVE meta-game.

In the case of the U’K membership, their ability to call on trusted allies when they lost control of the alliance was the deciding factor in their survival. The New Providence Holders formed ranks around crippled U’K and gave them the breathing room needed to reconstitute the alliance and go on the offensive.

In the case of CVA, their tendency to throw allies under the bus for CVA’s short term advantage has lost them most of their friends. The old Providence holder alliances are scattered to the winds. Some, like Paxton, have disbanded altogether. Consequently, when the U’K purge occurred, CVA had no one to call on to back their play for gains in Providence. CVA was forced to play a back-up role to Hydra Reloaded, and ended up the loss leader in the latest Providence campaign.

Having allies has always played an important role in EVE. Under Dominion sovereignty rules, however, maintaining solid alliances (both up and down the alliance food chain) is critical.

2) Don’t be predictable:

Razor’s tendency to repeat the same tactic set with their armored HAC gang left them vulnerable to the Agony trap that laid them low. In short, the Razor fleet’s FC became predictable; which is anathema when performing hit and run operations in enemy territory. If your enemies can anticipate you, they can control the time, place, composition and tempo of battle.

And that's today's lesson.

For my next planned post I'll break away from my usual "wall of text" and use photos of attractive, mostly nekkid women to illustrate The Rise of the CareBears

Look for it.