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Ashanta Shaanzera
Imba Industries
Posted - 2010.03.09 08:17:00 - [1]
 

Maybe I'm crazy, but this just does not make sense to me.

I've been doing T2 ship construction for some time now and I've recently started investigating the implications and costs of going into capital construction. Obviously looking at freighters first, as these can be produced in hi-sec.

Based on my calculations the profit you can churn out when you build and sell single Charon (with perfect ME on the freighter BP and say about ME=50 on all the capital construction parts) is less than 100 million ISK a shot. And that excludes the cost of BPCs... in fact BPC packs for Charons presently retail for about double that. Which means that construction cost + BPC cost > retail price.

Perhaps those corps who have researched BPOs are simply willing to put up with ridiculously low ROIs on their BPOs?

Or am I missing something? I can't imagine why anyone would spend weeks gathering materials and building a freighter if you only make a couple of tens of millions out of it.

Please tell me my calculations are horribly wrong...

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.03.09 08:42:00 - [2]
 

No, your calculations are even way too much optimistic.

The margins are low enough that people last summer mass sold their capital BPOs. So I got i.e. freighters BPOs with ME5 PE2 (read: half a year of research+) for well below NPC price, several CAP parts BPOs ME > 30 all for below NPC cost.

You are welcome to compete in a mega-super-saturated market, you'll find it fun.

EvE is full of idiots who believe that "volume is god" and that BPOs and minerals are free, therefore they churn out 10000 times what the EvE demand for that item is and thus make any item they touch worthless.

Then those like me step in, get their fail BPOs for a pittance and buy their fail stock at below reprocessing price and resell the minerals.

Thanks for working and researching hard for us to enjoy Razz

Ashanta Shaanzera
Imba Industries
Posted - 2010.03.09 12:04:00 - [3]
 

Crap, and I was hoping I had it wrong...

What we're saying is, there is always a bunch of idiots who want to produce capital ships for the sake of producing them (like an achievement in itself) rather than making money. I was worried that this might be the case.

So many people have told me that T2 production and Capital production is the $$$$ holy grail endgame. Bit of a disappointment to see that the margins on freighters are actually smaller than the margins on some cheap-ish T2 ships (in absolute terms!)

Anyway, as you said, anyone in EVE doing something stupid creates an opportunity for someone less stupid to make real money, so guess its all good Cool

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.03.09 12:30:00 - [4]
 

Well, capitals used to be an Holy Grail.

But even the steepest curves to a specialty can be overcome by lining up enough monkeys wrangling at random directions.

So once it became mainstream, it died, like every EvE feature that hides good income does when going mainstream. Only missioning can survive due to it being an ISK faucet working regardless of competition.

Hentuku
Posted - 2010.03.09 12:39:00 - [5]
 

Well this is exactly what you would expect to happen in a market that implements Capitalism in its purest form. Margins are squeezed until profits become non existent, or at least until profits aren't worth the effort. At that point you would expect people to not bother, but alas in eve this is not the case and people carry on regardless.

You also have the problem that nothing ever wears out in eve, something that CCP should implement at some point. This would increase demand for products.





Aeneidae
Caldari
Quallity Assurance Business Unit
Posted - 2010.03.09 12:54:00 - [6]
 

Originally by: Hentuku

You also have the problem that nothing ever wears out in eve, something that CCP should implement at some point. This would increase demand for products.




I disagree. Ships blow up, implants are lost, uncounted researched BPO's get destroyed in hauler ganks. EVE is probably the harshest MMORPG on the market at the moment, where you can lose billions in a blink of an eye. Demand has already increased and does increase whenever wars are going on. I honestly would see equipment wearing out timer (30 days for a Drake for example, and after that it gets destroyed in your hangar) adding too much grief to a game that has plenty of grief already.

The solution for small margins (and i'm not sure that's a bad thing, by the way) would be overspecialization in ship building. 6 months to get to build a certain type of Battleship, etc. That would bring a huge inflation in ship prices though, and after 2 years (and EVE is around for 5 actually) the prices would level again, because out of 300.000 players there will be 100 that will reach that specialization level.

Hentuku
Posted - 2010.03.09 13:02:00 - [7]
 

Edited by: Hentuku on 09/03/2010 13:03:10
Originally by: Aeneidae

I honestly would see equipment wearing out timer (30 days for a Drake for example, and after that it gets destroyed in your hangar) adding too much grief to a game that has plenty of grief already.



I never mentioned anything as extreme as that :)

Something subtle, such as the chance of failure of a component or perhaps a ship increases with its age. Probably very unlikely something would ever fail, however there would be a small chance.

Perhaps people would spend a premium for ships with a very low chance of failure, or purchase newer equipment/ships every now and then to reduce the risks.

Edit....

This would give modules and ships something that BPO's already have, added value.

Grozen
Caldari
Titan Core
Posted - 2010.03.09 13:13:00 - [8]
 

Actually if you calculated it you would still make good profit from freighter building if you have well researched bpo and produce at pos.It will however be slow you don't want to tie your isk into capital production unless you have at least 700b and you like to afk more then play.

Ave Volta
Perkone
Posted - 2010.03.09 21:14:00 - [9]
 

Edited by: Ave Volta on 09/03/2010 21:15:04
Originally by: Grozen
Actually if you calculated it you would still make good profit from freighter building if you have well researched bpo and produce at pos.It will however be slow you don't want to tie your isk into capital production unless you have at least 700b and you like to afk more then play.


700B? I think it's around 6.5B to buy the researched freighter and component BPO's in order to make a freighter. At current prices it would take around 70 Freighters to break even on a Charon. Those are rough numbers but close enough.



Berenices Herculina
Gallente
Center for Advanced Studies
Posted - 2010.03.09 21:43:00 - [10]
 

Or, buy BPC pack at first. You don't have to get BPO to start business.

Jacabon Mere
Caldari
Capital Storm.
Reverberation Project
Posted - 2010.03.09 22:57:00 - [11]
 

Originally by: Berenices Herculina
Or, buy BPC pack at first. You don't have to get BPO to start business.


that would reduce already low profits. At least you would want the freighter bpo, a cap cargo bay and a construction parts bpo. That's already goon to cost you the best part of 4 bil.

That's 20 days worth of building for about 50 - 70 mil profit. Nearly every t1 ship is better to build than that.

Herr Wilkus
Posted - 2010.03.10 01:08:00 - [12]
 

I'm perfectly content with 100M a shot per freighter.

4x Freighter BPOs + 4x Cargo BPOs + 2x Parts BPOs + 1x Propulsion BPO + 1x Armor BPO.

Thats what, 13 Billion? Crank out 8 Freighters a month, you get your investment back in 16 months?

Sounds about right to me, considering you don't have to do jack crap to manufacture - and you can always sell the BPOs at a later date.

Its not like I was using the ISK for anything. Not like I was using those manufacturing slots of anything either.




Syds Sinclair
Posted - 2010.03.10 05:35:00 - [13]
 

Originally by: Herr Wilkus
Its not like I was using the ISK for anything. Not like I was using those manufacturing slots of anything either.


1- Could have used the isk to invest into a higher ROI secured IPO
2- Could have used those manufacturing slots to produce an item that makes more then 4m a day.

nStedt
X Gate Industris
STR8NGE BREW
Posted - 2010.03.10 12:01:00 - [14]
 

Originally by: Herr Wilkus
Thats what, 13 Billion? Crank out 8 Freighters a month, you get your investment back in 16 months?

I think this is wrong to view it. Your initial investment is not lost, you can easily liquidate and get NPC prices for it. You need to decide if the ROI is worth your while and compare it to other opportunities you might have for the same isk amount.

With that said, the ROI in cap building is indeed not that great currently.

Dav Varan
Posted - 2010.03.10 20:30:00 - [15]
 

Edited by: Dav Varan on 10/03/2010 20:32:06
Its not profitable to build and sell Cap ships from BPC's you are quite right.

Some things you need to bear in mind for it too make sense.

1) single run blueprint copies take longer ( 3 x iirc ) to produce than making the actual ship straight from the BPO.

Therefore while the BPC's may be more expensive than the profit margin from building the BPC copier is actually gettin less isk per hour for making copies than he would for building.

This is offset somewhat or maybe completelly by not needed to invest large quantites of iskies in a mineral buffer.


2) This is a game shhhh! :) and some people like to build there own ships to fly as it gives them a greater sense of achivement.


BPC packs are generally aimed at people who wanna build there own capital or those people that have lots of minerals a long way from an open market where they can sell them.

It is generally a lot less hassle if you need a freighter out in 0.0 and have the minerals there allready to just get a BPC pack.


If you want to build caps for sale you will need the BPO's.
and you can expect 60-70m profit per freighter on a resonable me level prints.

Carriers are still making some cash 40-50m but require a hell of a lot more investment in BPO's.
Dreads are not making any cash whatsoever atm.
Rorqual is making nice cash if you can build them.

If you are building carrier/dread/rorq you need to take into account the extra value of the minerals in your build location.

Expect to pay a 10% premium on minerals over and above jita prices for a location that is the first jump into lowsec from a high sec only route from jita.

If you move the minerals yourself then expect to have your freighters ganked every so often and formulate this into your build price.


For high sec builds.
e.g.

4 freighter BPO
4 Cap Cargo Bay BPO
2 x parts
1 x propulsion
1 x armor

Thats a initial investment in the region of 12 Billion.

You will need further liquidity of 5B for a mineral buffer if you produce the ships in batches of 1 ( 12 day build cycle ) or 10B for a mineral buffer if you produce the ships in batches of 2 ( 23 day build cycle ).

So for invested capital of 17-22B you can expect to get back your initial investment of 12B in a little under 2 years.

You'll need a maxed production character to run enough slots.

Compared to the 5-6 year roi on T2 bpo's , Cap production is still quite attractive , but there no guarantee it will stay that way.

Competition is increasing and margins are falling all the time.
Dreads are now out of the running for profits.
Carriers are not far behind.
Freighters still have some life left in them.
Rorqs are still nice atm but for how much longer is anyones guess.
I cant comment on Orca's as I dont build them.





Madrugan Shatterstar
Caldari
Fusion Enterprises Ltd
Morsus Mihi
Posted - 2010.03.11 02:11:00 - [16]
 

Is it worth it for someone to get the BPC kit of any capital ship, considering they have the requisite production skills, if they want to save money from the market at this time?

Or is it more worthwhile to buy the hull outright, currently?

Tonto Auri
Vhero' Multipurpose Corp
Posted - 2010.03.11 04:18:00 - [17]
 

Originally by: Madrugan Shatterstar
Is it worth it for someone to get the BPC kit of any capital ship, considering they have the requisite production skills, if they want to save money from the market at this time?

Or is it more worthwhile to buy the hull outright, currently?


Don't know for freighter, but, say, for barges, I often found that rather than building them from BPC (I have skillz), I better sell minerals (or even raw ore, which sometimes sells for more - and I have perfect refining...) and buy already built one cheaper. Could very well be the case for other "BPC packs"...


 

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