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blankseplocked Debunking myths: there is no inflation in EVE
 
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Misaki Yuuko
Caldari
Posted - 2011.04.06 11:58:00 - [1]
 

Edited by: Misaki Yuuko on 06/04/2011 11:59:32
I resub after a year and the first thing I hear is all this nonsense about inflation in Fanfest talk, (I couldn't download the QEN for some off reason, but I guess it will be the same data as in Fanfest presentation) etc. I haven't done much purchasing yet, but for what I have seen, there isn't much difference in prices before I unsubbed, PLEXES (my first purcharse) are pretty much were they were the last time I bough one, and if I had to take one thing as an index for inflation, it would be PLEX.

Ok, let me explain a bit on layman terms on inflation and bull****:
1) First fact: correlation doesn't mean causation. This basic self-evident fact that every scientist is pretty much unknown apparently by economists, and this is what drives crazy economic theories (including in EVE-O). So while monetary mass increase IS necessary for inflation to happen, is not by any event the only reason for inflation to happen.

2) Inflation is not driven only by monetary reserves, but by circulation and consumption. So we players in EVE are like banks IRL. Yes, we are not like corporations or families, but like banks. Even better, because the money we create is not credit-money, but pure fiat-money free of debt, so this means the economy DOES NOT need eternal growth to be sane, it can stabilize itself pretty much alone.

IRL banks create credit-money being active (lending credit), in EVE-O we create fiat-money being active (killing npc i.e.). Why the distinction is important between being like banks or being like firms/families you will see now: increasing bank reserves does not create inflation, this means you can be sitting on 1 trillion of ISK on your account and this won't drive inflation up, inflation will only go up when these reserves are circulating in the economy (IRL by lending them; in EVE by direct consumption by the players).

3) So we have monetary mass in aggregate (which in EVE is all monetary base because it isn't created by crediting), and money distribution amongst the playerbase (it would be interesting to see a normalized gaussian distribution of the money, averages are useless). But then we have consumption, and when we see consumption things are not so clear.

We don't only create money but produce and create too commodities used for production (minerals, moon goo, etc.), actually the ratio between money and commodity consumption (which is, in last term, driven by ships dying) is what does matter. Compare sleepers stuff to minerals, what does drive price is the scarcity of what is being produced versus the demand.

Is ******ed to say there is inflation when what you're seeing is less consumption that drives the prices down. Indeed while you may have monetary inflation, you have a price deflation even, and don't worry because hyperinflation can't happen in EVE-O (due to some vital differences between EVE-O and real economies, no matter what CCP marketing says about EVE-O being real), in short: you can't lose confidence in the currency. Actually this could happen if you could create your own currency (for example alliances could force people to use their currency in their own territories) and if you had several currencies floating (or pegged) against the ISK.

You want to drive inflation up: then what you want is more stuff being blown up (add to that that while you blow up you print money by insurance), or more scarcity on the different commodities. You want it down, the contrary. You can influence prices by making ISK's more easilly available to the average user, but it's not by any factor the only and main reason for price inflation/deflation.

[continues]

Misaki Yuuko
Caldari
Posted - 2011.04.06 12:00:00 - [2]
 

4) So why all this bull**** about inflation then. It's easy to explain: PLEX. What does really worry CCP is the purchasing power of the PLEX, then again we can create PLEX (by buying them with real money) into the game, but if their purchasing power is too low, then we stop buying PLEX and that does mean less income for CCP. From a player pov it doesn't matter, because the market will go back to equilibrium at some point, but for CCP indeed it does matter, because people will stop buying PLEX.

So if the stock of PLEXES increases and players can't sell them and start driving the price down this is bad. You actually need PLEX consumption to drive their price up. If there is overall deflation this wouldn't be a problem, because their purchasing power would be at parity with other prices, but what really does happen is that other prices are already stabilized so they lose purchasing power.

This is why CCP said they MAY intervene in the PLEX market (I pressume buying PLEXES from players) if their purchasing power falls bellow a given level.

In sum: The talk about inflation is nonsense, and any reballance to sinks/faucets should be done on gameplay basis , not on economic basis. EVE-O economy is quite stabilized and will stay that way as long as they don't do crazy things, more consumption (wars) would drive inflation up a bit, and then maybe they would have to intervene.

But take this in mind: inflation does not mean that people can consume more, that's ******ed, inflation means that currency purchasing power falls (seek evidence IRL), so you can consume LESS, not more. So what's the problem from an economic/financial pov: plexes, where you enter real money and CCP income, and they get nervous, obviouslly.

Trivia: The fact that EVE-O economy can be stable or have deflationary prices while not crashing is because we can print our own money, so even if prices fall or stabilize currency availability will still flow because it's not caused by centralized financial systems.

Sonva Lat
Posted - 2011.04.06 12:14:00 - [3]
 

Competition drives the prices of common goods down; it is not an indicator of deflation as the "cost of living" does not change in Eve (because there isn't one).

The market price of an item will be the price that the marked can sustain. For goods where supply outstrips demand inflation is not a consideration as sellers cut prices to compete; however, with supply restricted items, such as plex and officer modules there is a clear inflationary trend.

ISK is more available than ever, and people are generally much richer than ever. A huge inflationary pressure has built up, but there are very few outlets for this pressure. Where it can be exerted it *is* being exerted.

Merouk Baas
Gallente
Posted - 2011.04.06 12:20:00 - [4]
 

Edited by: Merouk Baas on 06/04/2011 12:20:57
edit: nevermind sorry

Misaki Yuuko
Caldari
Posted - 2011.04.06 12:25:00 - [5]
 

Originally by: Sonva Lat
Competition drives the prices of common goods down; it is not an indicator of deflation as the "cost of living" does not change in Eve (because there isn't one).

The market price of an item will be the price that the marked can sustain. For goods where supply outstrips demand inflation is not a consideration as sellers cut prices to compete; however, with supply restricted items, such as plex and officer modules there is a clear inflationary trend.

ISK is more available than ever, and people are generally much richer than ever. A huge inflationary pressure has built up, but there are very few outlets for this pressure. Where it can be exerted it *is* being exerted.



Originally by: Sonva Lat
Competition drives the prices of common goods down; it is not an indicator of deflation as the "cost of living" does not change in Eve (because there isn't one).

The market price of an item will be the price that the marked can sustain. For goods where supply outstrips demand inflation is not a consideration as sellers cut prices to compete; however, with supply restricted items, such as plex and officer modules there is a clear inflationary trend.

ISK is more available than ever, and people are generally much richer than ever. A huge inflationary pressure has built up, but there are very few outlets for this pressure. Where it can be exerted it *is* being exerted.



So you didn't read the post: it does not matter if people is sitting on more money if they don't spend it. There is no price inflation: I checked some complex modules for fitting and the prices are pretty much average to what they were a year ago. Pirate ships more or less the same even cheaper, T2 ships more or less the same, minerals didn't change much, etc. (I guess price indexes are on the last QEN but unfortunally for some odd reason I can't download it, it's like blocked.)

About deflation, yes competition drives down prices and at some point they stabilize (that's why I said they are pretty much stable), also because EVE is full of people who don't care about opportunity cost (because it's a game and they do it for fun, or are just tards) prices will fall bellow the expected equilibrium sometimes.

You don't get the basic fact that inflation means prices going up, which renders your isk pile less valuable. Inflation does not mean you can purchase more, but that you can purchase less.

Opertone
Caldari
Deep Core Mining Inc.
Posted - 2011.04.06 12:32:00 - [6]
 

what nonsense...

BOTs, which generate excessive ISK also drive the extra demand. Without bots the purchasing power is more or less balanced against the item production. The surplus money from bots goes directly into the markets and overheats them. In short term prices go up. In long term they find a new equilibrium point, until a new wave of botters join in.

CCP introduced a new upper limit of ISK generation through nerfing 0.0 sites. In real world money can be printed with any desired pace, it has no internal value. In eve money inflow is limited at a certain rate and tied to fixed NPC market prices.

In eve ISK is not a currency, in fact it is a commodity.


Misaki Yuuko
Caldari
Posted - 2011.04.06 12:45:00 - [7]
 

Edited by: Misaki Yuuko on 06/04/2011 13:54:24
Originally by: Opertone
what nonsense...

BOTs, which generate excessive ISK also drive the extra demand. Without bots the purchasing power is more or less balanced against the item production. The surplus money from bots goes directly into the markets and overheats them. In short term prices go up. In long term they find a new equilibrium point, until a new wave of botters join in.


Hardly backed by data: there is no price increase in anything, unless you go back to 2003. But then again when markets are fresh they are not in equilibrium, so... compare prices now to 2008 or 2009: there is no price inflation no matter how you spin it.

This does not mean they don't have to kill bots or rebalance for gameplay issues.

Quote:
CCP introduced a new upper limit of ISK generation through nerfing 0.0 sites. In real world money can be printed with any desired pace, it has no internal value. In eve money inflow is limited at a certain rate and tied to fixed NPC market prices.

In eve ISK is not a currency, in fact it is a commodity.


Agreed about the last thing, and that's why the inflation chat (in pure monetary terms) is nonsense. But only partially: EVE isn't a barter economy, on the marketplace you are forced to use ISK as a medium of exchange, and ISK is the unit of account in the game, so it's a currency, but in some way is commonodity money that has some value constrained by other factors.

Greater Roadrunner
Posted - 2011.04.06 12:53:00 - [8]
 

Edited by: Greater Roadrunner on 06/04/2011 12:54:10
Originally by: Misaki Yuuko
I haven't done much purchasing yet, but for what I have seen, there isn't much difference in prices before I unsubbed, PLEXES (my first purcharse) are pretty much were they were the last time I bough one, and if I had to take one thing as an index for inflation, it would be PLEX.


Inflation is an increase in general level of prices - measuring it using a single commodity and only two points in time is complete BS, therefore argument and conclusion are irrelevant.
QEN has a CPI graph in it though I guess you won't let some chart to stand in the way of good conspiracy theory.

Liorah
Posted - 2011.04.06 12:58:00 - [9]
 

If CCP manipulating the PLEX prices means that they'll actually, finally, crack down on the botters, then I'm all for it. But they need to be up front about it, instead of hinting at it in whispers or vague uncertain statements. Say things like: "You can buy 350 mil ISK for $15 USD" or "You can buy 30 days of game time for 350 mil ISK", and not: "The market decides the value of a PLEX."

In fact, just take them off the market and put a button in stations and outposts.

Either control it, or leave it alone. Don't control it and pretend that you don't. That's being deceitful for no reason at all.

Kara Mitsui
Perkone
Posted - 2011.04.06 13:04:00 - [10]
 

I'm no economist, but I too have been waiting for the last 5 years for the 'inevitable' hyperinflation that would come from the ever-increasing influence of bots and more popular plexes spewing vast amounts of isk into the universe.

But I, too, had a years break, and when I returned everything was pretty much the same. Every major price change that I found, whether up or down, was directly attributable to gameplay changes. The basic cost of T2 modules and T2 ships had changed very little, and if anything the trend was downward.

How is this the case? Have CCP increased the ISK sinks in the game to match the increase in ISK being generated? Are people just sitting on stockpiles of cash? Or are there just a handful of alliances who are sitting on mammoth ISK-piles with hundreds of trillions of ISK doing nothing?

You are both right about the way ISK in Eve is nothing like money in the real world, but I still don't really understand how inflation isn't happening. Sure, PVP between builders have kept T2 stuff under control but then you'd expect things like implants and pirate ships to have skyrocketed. Hasn't happened...

Why not?

Arnakoz
Posted - 2011.04.06 13:08:00 - [11]
 

meh, you're right. all in all everything in this game is priced at about what it costs to produce it. unless its very rare, then neither supply or production costs have much to do with it. only bottom end materials are subject to this inflation - and really only ore since all other base mats are pretty much constant (within some range of fluctuation) in price/supply. and since most T2 stuff doesn't use much ore based mats, there should never be much of an increase in prices for the vast majority of the items in game. maybe T1 stuff.

Skippermonkey
Tactical Knightmare
Posted - 2011.04.06 13:08:00 - [12]
 

plex having an expiry date would make things interesting.

buy yeah, the only isue that i can see CCP meddling with is an attempt to raise the isk value of a PLEX to fight against RMT.

LHA Tarawa
Posted - 2011.04.06 13:11:00 - [13]
 

Perhaps the inflation CCP is most concerned about is the size of fleets, the size of ships in those fleets, the wealth and power of the few ubber powerful alliances that run the main coalitions and contribute to the massive fleets and massive firepower in those fleets.

Making all 0.0 systems highly profitable increased the wealth of the mega alliances, and the size of the fleets those mega alliances could muster.

If you can't field 100 super caps, then you have to pay massive rent to your masters that can.

CCP has no clue how to break up these super alliances to shrink fights back to a managable level, while allowing the number of players in the game to continue to grow. But, despite not knowing how to do it, they know they really, really want to do it.

Patient 2428190
DEGRREE'Fo'FREE Internet Business School
Posted - 2011.04.06 13:16:00 - [14]
 

Originally by: Liorah
If CCP manipulating the PLEX prices means that they'll actually, finally, crack down on the botters, then I'm all for it. But they need to be up front about it, instead of hinting at it in whispers or vague uncertain statements. Say things like: "You can buy 350 mil ISK for $15 USD" or "You can buy 30 days of game time for 350 mil ISK", and not: "The market decides the value of a PLEX."

In fact, just take them off the market and put a button in stations and outposts.

Either control it, or leave it alone. Don't control it and pretend that you don't. That's being deceitful for no reason at all.



It would be a terrible day for EVE the second CCP starts to manipulating the PLEX market. Firstly, I don't think they could covertly pull it off before somebody in whistle blows them, and it can be an another giant threadonought and whining all around. Maybe they don't care about the bad press, but they do want to launch other games in the nearish future, a bad spike in PR isn't a wise business decision. The future is the Twilight MMO for CCP, not EVE Online, you don't want to hurt your reputation by screwing around with your second fiddle.

Secondly, they got their money from the initial PLEX sale, they don't care if you buy haircuts with it, if you arrange them in shapes in your cargohold, if you undock a bunch in your kestrel. They will always be a demand for it, so the flow of PLEX into the market will always continue, even if it worth 100mil or if its worth 600mil

Zey Nadar
Gallente
Unknown Soldiers
Posted - 2011.04.06 13:23:00 - [15]
 

Originally by: Sonva Lat
Competition drives the prices of common goods down; it is not an indicator of deflation as the "cost of living" does not change in Eve (because there isn't one).



For the majority of eve (highsec players) there is indeed practically no "cost of living". They don't have to pay taxes that are independent of their actions (ie would have to pay even if they are inactive), don't have to buy commodities on regular basis, no fuel, no new ships except rarely.

Of course, if "costs of living" would be introduced to highsec dwellers, so they would have to earn constant income to continue doing what they do, then it would make Eve feel more like second job, and people wouldnt sub to play it. Im interested to hear everyones thoughts on the matter.

I think it wouldnt be a bad idea to make staying in highsec cost a fixed amount of isk periodically, but lowsec/null stations would be free of this charge. Maybe this might make players move into lowsec more. At least it would be a pretty big isk-sink.

Etro Tanar
Posted - 2011.04.06 13:25:00 - [16]
 

I've been playing for a few years now and from the time I've started to now the only things I've noticed change in price were T2 ships, namely due to the moon resource changes by CCP. I think as a whole, people sit on a lot of ISK and do nothing with it. Prices won't go up becaues people want the best possible price for an item, regardless if they have a bundle of ISK. Therefore someone will always be able to undercut someone else until items are at or near cost price.

Closing the ISK faucet will only discourge spending, with players hoarding ISK more and more. Perhaps if we had more ISK sinks than the "looming inflation monster" wouldn't be an issue. Kneejerk reactions won't fix the economy in EVE, only planned out strategies with the long term in mind have any chance of being for the better.

Greater Roadrunner
Posted - 2011.04.06 13:31:00 - [17]
 

Edited by: Greater Roadrunner on 06/04/2011 13:37:30
Originally by: Zey Nadar

For the majority of eve (highsec players) there is indeed practically no "cost of living". They don't have to pay taxes that are independent of their actions (ie would have to pay even if they are inactive), don't have to buy commodities on regular basis, no fuel, no new ships except rarely.


Your description is only appropriate for a vegetable that logs in only for a chat and doesn't train any skills.

Quote:

I think it wouldnt be a bad idea to make staying in highsec cost a fixed amount of isk periodically


I think it wouldn't be a bad idea to collect a fee for every "nerf highsec" whine. Pigouvian tax ftw.

De'Veldrin
Minmatar
Norse'Storm Battle Group
Intrepid Crossing
Posted - 2011.04.06 13:37:00 - [18]
 

Originally by: Zey Nadar


I think it wouldnt be a bad idea to make staying in highsec cost a fixed amount of isk periodically, but lowsec/null stations would be free of this charge. Maybe this might make players move into lowsec more. At least it would be a pretty big isk-sink.



No, they would either pay the "tax" or quit the game. When are people going to learn that forcing someone to do something they perceive as unsafe is never going to work when other options are available?

Misaki Yuuko
Caldari
Posted - 2011.04.06 13:47:00 - [19]
 

Edited by: Misaki Yuuko on 06/04/2011 14:05:00
Originally by: Greater Roadrunner
Inflation is an increase in general level of prices - measuring it using a single commodity and only two points in time is complete BS, therefore argument and conclusion are irrelevant.
QEN has a CPI graph in it though I guess you won't let some chart to stand in the way of good conspiracy theory.


LMAO, the marketplace inside the game you can see the evolution of prices back to a year (not two single points in time), and I didn't check only one item, i have check complex mods (popular ones), pirate ships, T2 and other commodities (minerals and salvage). Anyway, ┐did you care to double-check even before saying anything? Because:

QEN Q1-Q2 2010:
- Mineral index from Jan 2009 to Jun 2010: from 80 to 60
- PPP index from Jan 2009 to Jun 2010: from 65 to 55
- SSPI from Jan 2009 to Jun 2010: from 85 to 70
- CPI from Jan 2009 to Jun 2010: from 60 to 55
- TechII index from Jan 2009 to Jun 2010: from 33 to 31

I see inflation everywhere Very Happy And I did go back to Jan 2008 and the trend (except a temporal rise in PPP Q2 2008) is decreasing prices, not increasing prices. I'll add lasts QEN when I can access them (must be some ISP blocking bull****).

This "inflation OMG" thing is stupid. There is no conspiracy theory, is common sense CCP care about PLEX market and it's their right to do so (Eyjo was pretty straight in the fanfest presentation, if there was a conspiracy they wouldn't talk openlly about the possibility of intervention in the market). If you were CCP you would too, but one thing can be fixed without talking about inflation in the rest of the market, BECAUSE THERE IS NONE.

Originally by: Kara Mitsui
Why not?


My opinion, as I put it more or less on the OP. You have tot ake into account the creation of the rest of commodities (minerals, moon-goo, sleeper stuff) and their scarcity. If there is balance there is no reason for price inflation, and it's more or less balanced.

Take in mind than when you kill an NPC it drops loot and salvage, and the drop tables are balanced with the bounties so inflation won't skyrocket. CCP has a lot of tools to keep prices at the point they want, they are pretty much like god in EVE: they have all the information they want and can decide what is created and what's not. They margin for adjustment is very high.

Hyperinflation can't happen in a MMOG, what can happend is very high inflation but hyperinflation what does really mean is the destroyal of currency (can't be used as unit of account anymore). And in EVE-O hyperinflation MMOG-style is difficult it happens anyway due to the sort of gameplay we've (no-levelling and ever increasing-difficulties, which renders the old stuff useless).

Sonva Lat
Posted - 2011.04.06 13:59:00 - [20]
 

Originally by: Kara Mitsui
I'm no economist, but I too have been waiting for the last 5 years for the 'inevitable' hyperinflation that would come from the ever-increasing influence of bots and more popular plexes spewing vast amounts of isk into the universe.

But I, too, had a years break, and when I returned everything was pretty much the same. Every major price change that I found, whether up or down, was directly attributable to gameplay changes. The basic cost of T2 modules and T2 ships had changed very little, and if anything the trend was downward.

How is this the case? Have CCP increased the ISK sinks in the game to match the increase in ISK being generated? Are people just sitting on stockpiles of cash? Or are there just a handful of alliances who are sitting on mammoth ISK-piles with hundreds of trillions of ISK doing nothing?

You are both right about the way ISK in Eve is nothing like money in the real world, but I still don't really understand how inflation isn't happening. Sure, PVP between builders have kept T2 stuff under control but then you'd expect things like implants and pirate ships to have skyrocketed. Hasn't happened...

Why not?


If you were expecting bots to drive inflation I think you have a fundamental misconception about the Eve economy.

Most bots produce minerals. Minerals are sold to players. Mining does not create ISK, it just redistributes it.

The cost of the vast majortity of Eve items are based on the mineral price. As the market is swamped with minerals those prices are low; no inflation is seen, even though ISK is more readily available.

However, inflation is seen in items such as Officer modules and PLEX. Market competition has little effect on the value of these items because the supply is so limited. Prices have risen considerably because people can afford to pay those prices.

With regards TII, inflation was stemmed by invention. Supply of TII is much higher now as production is not limited by the number of available BPOs (unlike normal items, BPCs did not lower TII production costs because it takes longer to copy the BPO than it does to make the item).
So again, it is a case of competion making inflation impossible for these items.

In Eve we have an oversupplied market catering to an increasingly wealthy populace. Inflation exists where supply does not outstrip demand, but otherwise it is limited by competion.

There is no incentive for manufacturers to increase prices because costs are not increasing. I have no doubt that the market could sustain far higher prices than we currently see, but overproduction and low base costs make this unlikely. There is no reason to restrict production - there is no penalty for overproduction. If your items aren't wanted the price will fall until someone just melts it down and makes something else. Unlike the real world the majortiy of the cost of an item in Eve is based on the raw materials - there are very few additional costs involved.

In summary, inflation does exist in Eve, but the nature of the economic simulation greatly restricts the places that inflation can manifest itself.

Misaki Yuuko
Caldari
Posted - 2011.04.06 14:33:00 - [21]
 

Originally by: Sonva Lat
In Eve we have an oversupplied market catering to an increasingly wealthy populace. Inflation exists where supply does not outstrip demand, but otherwise it is limited by competion.


Good post overall, but it makes no sense to talk about inflation in monetary terms when what you have is scarcity in "one commodity". ┐Officer modules are too expensive? Just modify the drop table and increase their supply. Officer modules are catered to hardcore players or old-timers who have amassed fortunes. And that's what CCP will do when they consider "their price is too high". the thing is that our free-market is totally manipulated by god in this game, and god is CCP. You don't have inflation because inflation is not about money supply, but about currency purchasing power (in our case about some sort of commodity-money because it's tied to mineral base).

Let me explain with an other RL example: top 1% can have 90% of the money in existence, but 1% can only spend so much: so they can buy luxury goods, but they can't drive up the price of normal cards unless they stockpile all the world production. And they can only do that as long as they still have money, but when they have run out of their financial capital stock, they can't do; and if there is an huge production capacity (like happens in EVE), the prices will back go to equilibrium fast. So durable market manipulation is only possible when you have the monopoly on PRODUCTION (i.e. technetium).

Inflation of monetary base does not matter, as long as price of stuff is cheap and what will determine if it's cheap or not is commodity supply and production.

The other argument I wanted to empathize is that, if what people is saying is that the problem is people can buy too much stuff to easily, what they have to do is drive up the prices for real, and that can only be done manipulating the scarcity of the other commodities (minerals, moon-goo, or sleeper stuff). So you want people to afford less things: then increase the scarcity of the other commodities (and let's see how good is that about consumption).

Liorah
Posted - 2011.04.06 14:33:00 - [22]
 

Originally by: Patient 2428190
It would be a terrible day for EVE the second CCP starts to manipulating the PLEX market. Firstly, I don't think they could covertly pull it off before somebody in whistle blows them, and it can be an another giant threadonought and whining all around. Maybe they don't care about the bad press, but they do want to launch other games in the nearish future, a bad spike in PR isn't a wise business decision. The future is the Twilight MMO for CCP, not EVE Online, you don't want to hurt your reputation by screwing around with your second fiddle.

In the most recent QEN, they already talk about plans to manipulate PLEX. They said they'll say what they do in the QEN report following any kind of action. I'm just saying to come out and be overt about it.

Originally by: Patient 2428190
Secondly, they got their money from the initial PLEX sale, they don't care if you buy haircuts with it, if you arrange them in shapes in your cargohold, if you undock a bunch in your kestrel. They will always be a demand for it, so the flow of PLEX into the market will always continue, even if it worth 100mil or if its worth 600mil

If PLEX was priced at 600mil, I'd be inclined to sell it. I definitely wouldn't be inclined to buy it. If PLEX was priced at 100 mil, I'd buy all I could, but I wouldn't sell any. That is because I'm accustomed to PLEX prices being 300-350 mil.

It would take some time before people became accustomed to much higher or lower PLEX prices. During that time, it would be a gamble as to whether you get a good deal or get ripped off, and the risk-averse would shy away from the PLEX market.

I remember reading somewhere that prices changed greatly one time before, and it had a negative effect on PLEX sales. I don't remember more details than that, hopefully someone else reading this thread does.

Greater Roadrunner
Posted - 2011.04.06 15:12:00 - [23]
 

Originally by: Misaki Yuuko

LMAO, the marketplace inside the game you can see the evolution of prices back to a year (not two single points in time), and I didn't check only one item, i have check complex mods (popular ones),

Now you'll have to explain what do you mean by "complex mods" and especially "popular ones".

Quote:

pirate ships,


I wonder where did you find a price graph for faction ships going all the way to "back to a year".

Quote:

T2 and other commodities (minerals and salvage).


So you're trying to tell me that t1 and t2 ship prices are the same or lower than they were month, three months, six months ago? LMAO indeed.

Quote:

Anyway, did you care to double-check even before saying anything?


Actually yes, I did care to look at recent QEN Q4 2010 CPI graph (which ends at December, and since that time things changed a bit more) and play the game for more than a year. Buying, selling and building t1 and t2 ships, ammo and mods included.

Grog Barrel
Posted - 2011.04.06 15:18:00 - [24]
 

Noes!, well used logic!. Be prepared for the witch-hunt.

Misaki Yuuko
Caldari
Posted - 2011.04.06 15:56:00 - [25]
 

Edited by: Misaki Yuuko on 06/04/2011 15:58:47
Edited by: Misaki Yuuko on 06/04/2011 15:57:33
Originally by: Greater Roadrunner
Now you'll have to explain what do you mean by "complex mods" and especially "popular ones".


Deadspace sorry (pith, gist and all that stuff). this on contracts only obviously, as accurate as you can get.

Quote:
I wonder where did you find a price graph for faction ships going all the way to "back to a year".


Yep that's true, I checked the pirate battleships and cruisers, they all were at the same level they were selling long time ago (and now they are way better because the buff they received) in contract market. The Rattlesnake i.e. is extremely cheap (less than 500 mill.), and the other are in the level they were before: (800-1100 mill.).

Quote:
So you're trying to tell me that t1 and t2 ship prices are the same or lower than they were month, three months, six months ago? LMAO indeed.


Indeed they are (check bellow for details), I checked HAC's and recon ships for the four races, and their prices are the same that a year ago or very similar.

Quote:
Actually yes, I did care to look at recent QEN Q4 2010 CPI graph (which ends at December, and since that time things changed a bit more) and play the game for more than a year. Buying, selling and building t1 and t2 ships, ammo and mods included.


Ok finally was able to get the the last QEN, and there is nothing but reinforcemnt of what I said.

MPI it's at 70, still lower than Jan 2009
PPPI it's at 65, at same level than Jan 2009
SPPI it's at 110, here there is an obvious increase (85 at Jan 2009), due to gamemechanics changes (PI) as stated in QEN so new equilibrium has yet to be found. Before the changes the SSPI was actually low than in Jan 2009 (75).
Tech II index is pretty stable and hasn't changed much since Jan 2009.
CPI it's at 65 at the end of 2010, 5 points higher than for Jan 2009; not so bad for 2 years for a growing economy actually.

As stated in the QEN the CPI increase (2010 Q4) is due to the addition of PI and to PLEXes, but the rest is not bad. Increase in the PLEX prices are good for CCP for the reasons stated in the OP, people will selll more PLEXES, and if they don't prices will keep raising. This is not bad as long as the rest of goods and commodities don't rise. ┐Maybe you pay your account with PLEXES and this worries you? Bad luck man. Indeed good news for the war on RMT too, the barrier to entry for the competition now is higher.

Overall the EVE economy is very healthy as are their prices. Even a bit of inflation won't be bad if the gang saying "people can afford stuff too easy" understood what inflation does really mean in the game context (which apparentlly they don't).

Excellent news and I'm proven right. Now let's wait for next QEN to see if the sky is falling and there is inflation (protip: there isn't :D).

P.S: Thanks to CCP for the excellent price index data, is precious as we've seen here Very Happy

Onkadis
Posted - 2011.04.06 15:59:00 - [26]
 

All the econ analysis doesn't really advance this discussion.

When I first became aware of the GTC market the cost of a 30 GTC in the forum auction 450-500 mil -- and people tell me that was a drop from the previous market price of around 650-700 mil.

I went on hiatus recently, and when I left the last major trend was 130-150 for 30 days but CCP had eliminated the 30 day GTC which caused the drop down to 130-15, but it was trending up and accelerating with the arrival of PLEX.

I think CCP wants PLEX to serve as an ISK sink.

So, the point of the "we're going to intervene" wasn't to express concern about a high water mark, but to make sure GTCs/PLEX continue to play a role as an isk sink.

I expect we'll continue to see rises in PLEX market. I think CCP is hoping we will.


The issue of inflation is a red herring. Prices are remarkably stable. I hate bots as much as the next guy, and they're clearly responsible for the proliferation of capital ships in the game (and they've kept the price of trit low (and stable) which keeps beginner miners out). Buuut let's not lose our heads.

For a different thread I pulled notes on old prices of minerals from 5 years ago and they were almost exactly the same. Back when there were very few bots (and those that were around had limited impact), very few exhumers, npc market shuttles to set a top cap on trit, and fewer people had the skills to reprocess mods and ships that were priced over mineral value.

So, I find this inflation discussion kinda hard to swallow.

What Eve could benefit from is mineral sinks that affect players (mostly high sec players) who are currently not generally subject to the main mineral sink - assplosion. Higher ammo mineral requirements, tech 1 crystal burnout rate increase, more meta 4 and faction mod drops, more bpc lewt drops. more radical, less enjoyable but likely effective ideas: ship consumption costs that affect older ships with more space-miles on them (ship fuel, ship wear and tear - requiring a mineral intensive refurbishing kit), empire docking fees, more low-sec manufacturing forcing industrialists to move between low-sec and empire.

These are all levers that can be pulled to change the mineral faucets and sinks without dramatically increasing the hurt on PvPers.

Esharan
Caldari
Posted - 2011.04.06 16:01:00 - [27]
 

Originally by: Misaki Yuuko

2) Inflation is not driven only by monetary reserves, but by circulation and consumption. So we players in EVE are like banks IRL. Yes, we are not like corporations or families, but like banks. Even better, because the money we create is not credit-money, but pure fiat-money free of debt, so this means the economy DOES NOT need eternal growth to be sane, it can stabilize itself pretty much alone.

IRL banks create credit-money being active (lending credit), in EVE-O we create fiat-money being active (killing npc i.e.). Why the distinction is important between being like banks or being like firms/families you will see now: increasing bank reserves does not create inflation, this means you can be sitting on 1 trillion of ISK on your account and this won't drive inflation up, inflation will only go up when these reserves are circulating in the economy (IRL by lending them; in EVE by direct consumption by the players).
[continues]


Inflation is driven by a lot more than monetary reserves, circulation and consumption. In-fact these are not even the most important factors. IFE, PPP, IRP, Interest Rates, GDP, Exchange Rates, etc. etc.... amiright?

Misaki Yuuko
Caldari
Posted - 2011.04.06 16:10:00 - [28]
 

Edited by: Misaki Yuuko on 06/04/2011 16:15:35
Originally by: Esharan
Inflation is driven by a lot more than monetary reserves, circulation and consumption. In-fact these are not even the most important factors. IFE, PPP, IRP, Interest Rates, GDP, Exchange Rates, etc. etc.... amiright?


Well that's an open question, but yes there are way more factors specially in a fiat-currency world with floating currencies (ie. see yen vs. AUD now and carry trade issues). PPP and GDP are indexes that materialize stuff like growth, capital stock, currency value, etc. which is in the end currency circulation, monetary mass and consumption, output capacity, etc. But this is way offtopic, obviouslly in the real world things are way more complicated.

What does matter in the context of the game, price inflation is driven mostly by consumption, production and scarcity.

Originally by: Onkadis
I expect we'll continue to see rises in PLEX market. I think CCP is hoping we will.


Completlly agree, this is good for CCP, it's an incentive to buy plexes and that means money for them. I see it more that way that as isk sinks, because there isn't really an ISK sink, but an ISK redistribution (which has it's utility driving up demand if that's what CCP really wants).

Also it's true people has forgot how much money did GTC cost at some points and I know because I used to fund two accounts with em. Probably they haven't played long enough to realize there isn't really inflation in this game, and I'm not even a very vet player (started playing early 2008).

Akita T
Caldari Navy Volunteer Task Force
Posted - 2011.04.06 16:15:00 - [29]
 

The OP sort of has a point, and it's partially a point I was also making not so long ago, BUT it's not quite that simple.

First off, yes, an increase in money supply does not necessarily mean inflation.
ISK has a way of trickling upwards to those that already have a lot of ISK, so even if average wallet size has gone up radically, median wallet size has probably not been too much affected. We didn't get to see the latter anywhere in any QENs, and it's also not extremely representative either with the 2-characters-per-account and 25%-of-subscribers-with-2-or-more-accounts situation we have.
Non-corp-nor-alliance-based INCOME levels are far more representative as far as potential inflation goes rather than the total money supply.

Second, yes, we MAY have some actual inflation, but it's nowhere near significant enough YET to warrant any sort of panic.
Emphasis on MAY, because I'm not quite convinced we actually do have any noticeable inflation when PLEX is out of the picture.
Why that focus on PLEX ?
Because the only item where you can clearly see a significant and relatively steady variation upwards in price is indeed the PLEX, and the PLEX was used in the QEN index with a pretty hefty weight, which is... questionable.
Yes, a PLEX is a relatively vital item, but it's a very "artificial" one as far as the EVE economy goes (you could even be tempted to call it "magic" from certain viewpoints), and its pricing has just as much to do with RL factors that are not really germane to gameplay issues.

Last but not least, there is no guarantee that lowering ISK faucets or increasing ISK sinks would "lower inflation" (at least not in the short run) as measured in the QEN, especially if PLEX remains such a heavy influence in the CPI (read page 30/52 of the latest QEN carefully to see what I mean), because you might actually see a spike in PLEX prices if unpopular changes are introduced (a noticeable amount of the relatively wealthier people switching from subs to PLEX payments).

Misaki Yuuko
Caldari
Posted - 2011.04.06 16:33:00 - [30]
 

Edited by: Misaki Yuuko on 06/04/2011 16:35:22
Originally by: Akita T
The OP sort of has a point, and it's partially a point I was also making not so long ago, BUT it's not quite that simple.

First off, yes, an increase in money supply does not necessarily mean inflation.
ISK has a way of trickling upwards to those that already have a lot of ISK, so even if average wallet size has gone up radically, median wallet size has probably not been too much affected. We didn't get to see the latter anywhere in any QENs, and it's also not extremely representative either with the 2-characters-per-account and 25%-of-subscribers-with-2-or-more-accounts situation we have.
Non-corp-nor-alliance-based INCOME levels are far more representative as far as potential inflation goes rather than the total money supply.

Second, yes, we MAY have some actual inflation, but it's nowhere near significant enough YET to warrant any sort of panic.
Emphasis on MAY, because I'm not quite convinced we actually do have any noticeable inflation when PLEX is out of the picture.
Why that focus on PLEX ?
Because the only item where you can clearly see a significant and relatively steady variation upwards in price is indeed the PLEX, and the PLEX was used in the QEN index with a pretty hefty weight, which is... questionable.
Yes, a PLEX is a relatively vital item, but it's a very "artificial" one as far as the EVE economy goes (you could even be tempted to call it "magic" from certain viewpoints), and its pricing has just as much to do with RL factors that are not really germane to gameplay issues.

Last but not least, there is no guarantee that lowering ISK faucets or increasing ISK sinks would "lower inflation" (at least not in the short run) as measured in the QEN, especially if PLEX remains such a heavy influence in the CPI (read page 30/52 of the latest QEN carefully to see what I mean), because you might actually see a spike in PLEX prices if unpopular changes are introduced (a noticeable amount of the relatively wealthier people switching from subs to PLEX payments).


Hi Akita T, obviously it's a complex issue because real CCP income is involved. I'm not so sure about your last suggestion, I couldn't say, we would need more info from CCP that they won't give us, about how much people that could is not paying their gametime with PLEX.

There is always the issue of having more than one account and if you get tired only pay for one for example. And this probably is the most pressing issue. But at the same time if people moves to PLEX subscription is not bad because that will drive prices up, so the incentive to sell more plexes will be higher and that's more revenue for CCP. So more or less it will sort itself alone, the problem here are multi accounts.

IMO the situation is quite stable: as long as the various price indexes remain stable, an increase in the plexes price is good for CCP. In case the price of PLEX dropped too much, it could be problematic for CCP (and they may have to intervene the market). But if price indexes go up, and plexes don't, that's pretty bad. The last, I don't see it happening as logn as they don't epically **** up someway.

My recommendation for CCP would be to not intervene it as long as the last doesn't happen. Probably they have built in-house statistics of a PLEX purchasing power against a basket of goods usually used by the PLEX users (and if they haven't, they should), and will target a price using that as a reference.


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