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Kerfira
Kerfira Corp
Posted - 2008.05.14 07:24:00 - [61]
 

Edited by: Kerfira on 14/05/2008 07:27:36
Funny thing about the people whining about 'opportunity cost', 'undercutting', etc.....

What seems illogical to you isn't so to others.

Let me just make an example here.....

Lets say that I've not trained trading to a high level, and that I sell high-end named items found in mission loot and ships produced from refined mission loot.

From my perspective, I have two objectives:
1. Sell fast so my trading orders aren't occupied for weeks on end.
2. Not spending time micromanaging sales orders.

Your high priority of 'make the most money possible' is so far down the list I can't even see it!

So, I'll happily put up my goods/ships at 10% lower than current high, as this will fulfill both my primary objectives. Selling minerals instead of ships might make me a few more ISK, but'd violate objective #2.
I'll also have the satisfaction of knowing some 'Opportunity Cost' persons will sit there fuming in righteous rage Razz

Your logic isn't global, but only covers your own particular situation!

cal nereus
The Graduates
Morsus Mihi
Posted - 2008.05.14 07:26:00 - [62]
 

Yup. Maximizing profit is not the top priority for many players.

Grarr Dexx
Amarr
Kumovi
The G0dfathers
Posted - 2008.05.14 08:34:00 - [63]
 

Branding, quality, market telling you who's selling or buying before the actual transaction, future dreams.

Lrd Byron
Posted - 2008.05.14 08:47:00 - [64]
 

Originally by: PaddyPaddy Nihildarnik
Edited by: PaddyPaddy Nihildarnik on 14/05/2008 02:10:47

Time seems to have zero value to a great proportion of the playerbase. This is a mentality that CCP cant fix, it must come from an external understanding. Perhaps some people enjoy grinding, whether it be mining, ratting etc etc and that is why they dont care too much about the efficiency of it, they would prefer doing a less productive "job" that they enjoy more. Nerfing entry level production will not change this.




In fact a players time has negative value, don't forget we are paying ccp for the opportnity to waste our time in this game.

Lrd Byron
Posted - 2008.05.14 09:05:00 - [65]
 

Edited by: Lrd Byron on 14/05/2008 09:08:23
Another obvious but big problem with trying to make any money off manufacturing is that for every item a player could want there is some manufacturer in their corp or alliance who will no doubt make it for cost of mats. Its like private companies trying to compete with government for some service or product. Government will always win out because they can operate at a loss and not give a crap, they simply appropriate the difference by force, private enterprises don't have that luxury.

Apocryphai
Caldari
State Protectorate
Posted - 2008.05.14 09:19:00 - [66]
 

Not read the entire thread so apologies if someone has already pointed this out.

What you're forgetting is that EVE's economy isn't a capitalist economy. A capitalist economy relies on 2 main classes - a ruling class that owns the means of production and a working class that labours for the ruling class at a wage rate lower than the value of the goods they produce.

In EVE the means of production are owned by NPC's and all the industrialists use them free of charge. There is no "working class" as such since everyone is a potential manufacturer if they so choose and the supply of materials has (for gameplay reasons, particularly the new/1st 6 months player experience) to be profitable for those supplying.

Therefore traditional capitalist economic thinking, which is what you're doing here Akita, simply doesn't work. You're trying to apply ideas that work in our current real world to a game environment and that would simply break the game. Nobody wants to pay 8/month (or whatever it is, I pay with ISK these days) for a second job!

The economies of scale, if they existed, would only really apply to the NPC's, since they're the closest EVE has to a true industrialist ruling class.


Pan Crastus
Anti-Metagaming League
Posted - 2008.05.14 09:26:00 - [67]
 

Originally by: Akita T

Rabble, rabble... rabble !
What can be done ?
Maybe, I should say... is it worth trying to do something ?
Or is everybody content with the current (pathetic, IMO) situation ?



Easy to see why: in RL, the manufacturer can concentrate on his task, having contracts that ensure delivery of materials at fixed prices etc.

In EVE, everyone wants to be the "AFK ISK maker" the manufacturer is, but noone wants to do the stupid low end income labor that is hauling minerals. In other words, the actual cost of moving around minerals is so high (because it reflects the need for user interaction) that there is no profit in building stuff (= almost no user interaction).

NPC couriers / Interbus would probably fix this for a while.


Venkul Mul
Gallente
Posted - 2008.05.14 10:01:00 - [68]
 

Originally by: Kolatha
Originally by: Taedrin

This means that the actual value of minerals is actually lower than market value. If people are willing to take an opportunity loss by using minerals to build an item and sell that item for less than the minerals are worth on the market, then that means that the value of minerals on the market is too high. Only way to stop this is to take advantage of these people's stupidity.



Thas is the most likely scenario. Those who insist on building their equipment using the market as their guide for the value of minerals are the ones who really need to rethink their process if they are trying to make a profit. Like most markets the value of minerals available is based on what the consumer will tolerate, not what the product is actually worth.

As for the "minerals are free" concept, that is an over simplification and a misunderstanding of how the typical miner/industrialist thinks. If I start the day with an empty wallet, mine a pile of minerals and sell the manufactured product for 20 mil then at the end of they day I am 20 million isk richer even if I could have sold the minerals for more on the market. That's the basics.

Now let's say I have priced my end product based on the market value of the minerals, ie I could have sold the minerals for 20 million isk instead of building something. At the end of the day I am still 20 million isk richer. The big difference now is that the guy who buys the minerals and builds the same product but buys the minerals from the market needs to sell at a higher price to make a profit. Say he sells at 22 million. At the end of the day the guy who builds from market minerals only has an extra 2 million in the pocket while the miner/industrialist has 20 million. Without some form of additional continual overhead to mining the guy who mines and sells a finished product will always be better off than the guy who builds from market minerals.

Now some would argue that minerals prices are best based on how much you could earn by ratting/missioning in the time that it takes to mine the minerals. Now because not everyone is interested in that aspect of the game the smart miner/industrialist will ignore this tripe and base their overhead costs and the final value of their product on a number of factors.

  • The cost of the blue print and how may items they need to sell at prices the market will tolerate before making back the cost of the blueprint.

  • The cost of initial setup of mining equipment (barges crystals etc) and how many products/how long before the equipment is paid for.

  • The cost of the manufacturing facility or the setup of a small industrial POS with consideration to how long before the equipment is paid off and lastly

  • The value of buying and reprocessing a shuttle.


At the end of the day there are just people out there who are willing to accept lower profits and longer return times on their investments and if my wallet is fatter at the end of the day than when I started then it is not a "losing process". The problem is not that some people are selling "below costs", the problem is that those who are complaining are just wanting instant profit and are unable to comprehend why others are willing to be more patient.


As a typical miner/industrialists I feel strongly offended by you suggesting this is my thinking. Maybe it is yours, but it is wrong.

The value of my minerals is exactly the price at wick I can sell them on market. Doing extra work to sell the end product at the same or lower price is idiot.

Kerfira
Kerfira Corp
Posted - 2008.05.14 10:03:00 - [69]
 

Edited by: Kerfira on 14/05/2008 10:09:59
Originally by: Pan Crastus
NPC couriers / Interbus would probably fix this for a while.

The NPC courier idea is actually one of the worst ever to have come from these forums.

The only reason anything has any value in this game is because some people spent real time acquiring or making it. In essence, there's no real difference between making hauling take no effort and making mining no effort. They're essentially the same as the value is created by putting time into doing it.


Implementing something like this seems 'nice', but what it would do would be very bad for the game. In one fell swoop, it would ensure that:
1. The 'Hauler' profession would be obsolete
2. No reason for any regional markets (an alt in Jita will suffice)
3. Everyone and their mother would produce their own stuff

If CCP were ever so mad that they implemented Interbus, it'd have to have the same disadvantages (or worse) as player hauling contracts:
1. Interbus goods would be transported by real NPC haulers (attackable)
2. Interbus offers no insurance on goods (except cost given back if lost)
3. Interbus could be war-dec'd
4. Interbus transport takes from 1-7 days
5. Prices would be relatively high (like 100k isk per 5000 m3 per jump or so)

Sokratesz
Rionnag Alba
Northern Coalition.
Posted - 2008.05.14 10:25:00 - [70]
 

Listed here are many reasons why i never ventured into any serious manufacturing, invention or trading, and why i make most of my isk selling pvp loot at very reasonable prcies in perimeter.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2008.05.14 10:43:00 - [71]
 

Edited by: Akita T on 14/05/2008 10:59:03

Originally by: Pan Crastus
Easy to see why: in RL, the manufacturer can concentrate on his task, having contracts that ensure delivery of materials at fixed prices etc.

In EVE, everyone wants to be the "AFK ISK maker" the manufacturer is, but noone wants to do the stupid low end income labor that is hauling minerals. In other words, the actual cost of moving around minerals is so high (because it reflects the need for user interaction) that there is no profit in building stuff (= almost no user interaction).

NPC couriers / Interbus would probably fix this for a while.


I would actually like (a lot more) if we would get an extension to the contract system, allowing us to set up "recurring, bulk mineral purchase contracts".

That is, not individual buy orders for each mineral, but instead something like
"offering 12 mil ISK for 500k trit, 125k pye, 32k iso, 8k nox, 3k zyd and 1k mega, up to 500 such packages this week in one of the following 7 stations : a,b,c,d,e,f,g"
The style of the contract matters, not the values listed.

Originally by: Le Skunk

Originally by: Akita T
The game is full of idiots that fail to go bankrupt !
People fail to go banckrupt because it's so easy to just fund a losing process via [...]

Or sell some Game Time Cards which you wholheartedly defend
ROFL de deee
Eve is also full of CRUD PVPERS who fail to go bankrupt because they just hop out and use dollars to buy another ship.


Well, at least the "crud PvPers" know they're bad, because they have to sell GTCs.
If the so-called "industrialists" would ALSO have to start selling GTCs on a regular basis because they would be actually losing some serious amounts of ISK, that is bound to raise some warnings in their heads eventually.


P.S. Where's my hangover ? Anybody seen it ? Embarassed

Inertial
Did I just do that
Test Alliance Please Ignore
Posted - 2008.05.14 11:05:00 - [72]
 

I think CCP needs to do two things.

1 Quality:

I think CCP needs to introduce quality levels to stuff. This shouldn't be a huge thing, f.x. the max difference between a shoddy Celestis and premium Celestis could be 10% in all attributes. Add some chance on how good a item will turn out. This will mean that some people can make a name for them selling only quality stuff, while some can go for quantity.


2. Mass Production:

Generally when somone makes something, if it is mass produced it becomes cheaper. Spare materials from one ship can be used on the next one and you can also use Assembly Line techniques to manufacture faster. A tie in with my 1. could also be that a huge production line without quality control will more likely result in a shoddy product.

With these two things there are several ways you can go, which will make it more fun to manufacture (you can make a name for yourself as a quality merchant) and more complex for Industrialists and Traders.

Thoris Levithar
Gallente
Gadget Factory
Posted - 2008.05.14 11:19:00 - [73]
 

Funny that everyone moans about massive over-supply, but noone complains about the means to create it: the over-abundance of factory slots. Take a look at the situation with research slots, why is production treated so differently?

permith
Posted - 2008.05.14 11:20:00 - [74]
 

I still don't see how the playerbase would be able to absorb all the extra production.

Inertial
Did I just do that
Test Alliance Please Ignore
Posted - 2008.05.14 11:22:00 - [75]
 

Originally by: permith
I still don't see how the playerbase would be able to absorb all the extra production.


The easiest fix would be to remove high-sec Twisted Evil.

Algia Knightstorm
Posted - 2008.05.14 11:59:00 - [76]
 

Originally by: Akita T
Because I'm mildly drunk at the moment I'm

Actually, there is no economy of scale to speak of !
Do you manufacture one ship, or 100 ships ?
Well, from a purely "profit" point of view, it doesn't really matter anymore...the end product "costs" about the same in both cases. The price differences are minimal.
This makes almost no sense ! I mean, there SHOULD be some kind of bonuses out there for an economy of scale !
If nothing else, then at least get harsher penalties for those that only manufacture one item at a time (or a very small batch).



The end product costs the same so that people getting in to it can compete with you. If you had it even better and could undercut everyone because you can make EVEN MORE at LESS COST how would they compete? they wouldn't. Why would anybody move into production if tey can't compete? They Wouldn't. You would effectivly kill off a trade.


Dingo
Posted - 2008.05.14 11:59:00 - [77]
 

Venkul Mul
The value of my minerals is exactly the price at which I can sell them on market. Doing extra work to sell the end product at the same or lower price is idiot.

You sir are quite wrong!

I value my minerals at 0 isk becasue they are sitting out in space waiting to be mined. If I mine 8 mill tritanium for a Battle Ship it's cost me nothing (I know what your going to say but the cost of mining drones and crystals is next too nothing) The industrialist who buys his minerals off the market to build the same Battle Ship has to sell them again above the value he bought them at in order to make a profit, wheres the sence in that?

Gamer4liff
Caldari
Metalworks
Majesta Empire
Posted - 2008.05.14 12:07:00 - [78]
 

Originally by: permith
I still don't see how the playerbase would be able to absorb all the extra production.


Factional warfare, if enough people embrace it, will cause more PvP. More PvP = more ships + fittings lost = more demand.

Badlamb
Baptism oF Fire
Sons of Tangra
Posted - 2008.05.14 12:14:00 - [79]
 

Edited by: Badlamb on 14/05/2008 12:29:31
Originally by: cal nereus
A lot of stuff is sold at certain prices because of the "I'm selling it used" mentality too. Y'know, like if I buy something, use it, and then get bored of it, and sell it again: I'm less inclined to sell for a profit and more inclined to just get rid of it so I can play with something else. Since a used piece of anything is just as effective as something newly built, there's less and less value to making more of something that is already abundant in the economy. Sad


I think this is a really interesting point. Currently it's very easy for me to buy up the assets required for a process (i.e. a ship), make a profit from the use of those assets, then sell them on for the same price I've bought them for. For many people (myself included) this means that the sale price of an item I've used to make money is irrelevant, hence I can put my mining BS that I've made say 300mil from on the market for the same price I bought it for, or alternatively put it on for 10mil, undercut everyone around me and still have made a profit. This just seems wrong to me as for something that tends not to get destroyed very often there just won't be a decent market out there, as used products are just as good as new.

Maybe some concept of depreciation would be good for the market in general?

Venkul Mul
Gallente
Posted - 2008.05.14 12:23:00 - [80]
 

Originally by: Dingo
Venkul Mul
The value of my minerals is exactly the price at which I can sell them on market. Doing extra work to sell the end product at the same or lower price is idiot.

You sir are quite wrong!

I value my minerals at 0 isk becasue they are sitting out in space waiting to be mined. If I mine 8 mill tritanium for a Battle Ship it's cost me nothing (I know what your going to say but the cost of mining drones and crystals is next too nothing) The industrialist who buys his minerals off the market to build the same Battle Ship has to sell them again above the value he bought them at in order to make a profit, wheres the sence in that?


Wonderful:

1) the minerals in space are not yours, they are yours when they are in your hangar;

2) your time is worth nothing, mine is worth something;

3) the industrialist is adding work to get a more complex product, it is only logic he will charge more (or you think that he has got the BPO/BPC for free, the skill at no cost, and so on?).

Pricing the end product at the same level of the components used is the same as saying that the extra work as 0 value.


Saladin
Minmatar
Minmatar Ship Construction Services
Ushra'Khan
Posted - 2008.05.14 12:45:00 - [81]
 

I am kind of surprised no one picked up on what Kaz was saying about reverse economy of scale. Because of this round off nonsense, its actually cheaper to make things one at a time instead of 100 at a time.

'Economies of Scale' is not about huge factories, it boils down to a very simple concept. In any enterprise or product there are two types of costs, fixed costs and variable costs. Fixed costs are costs you pay irrespective of how many units you are producing, and variable costs are costs that increase with the number of units.

You can find this in game for a POS. Any given POS with a specific fitting will always consume the same amount of fuel every hour. That is a fixed cost. If you are doing reactions at the POS, then you need moon minerals. The more moon minerals you buy, the more often you can react them. So here the cost of the moon minerals is a variable cost, and the cost to fuel the pos is a fixed cost. If you keep your reactors busy all the time by continuously supplying it with moon minerals, you are realizing the benefits of economies of scale because the fixed cost (POS fuel) is less per unit. Thats why you do not just let your POS sit there idling if you're running reactions or doing inventions.

A factory slot works different, there is no real fixed cost associated (well its negligible now) with that. If the pricing structure for slots was such that it was 10M isk per job, then no one would use it to build one cruiser. It would favor the person submitting a job for 100 cruisers. Just a thought.


Trathen
Minmatar
Posted - 2008.05.14 13:04:00 - [82]
 

Originally by: Pan Crastus


In EVE, everyone wants to be the "AFK ISK maker" the manufacturer is, but noone wants to do the stupid low end income labor that is hauling minerals. In other words, the actual cost of moving around minerals is so high (because it reflects the need for user interaction) that there is no profit in building stuff (= almost no user interaction).




You got it there and that's why Akita's making a silly complaint in the first place. Manufacturing is a safe and easy way to make ISK, you make a few clicks, wait, and voila, minerals turn to items. It tends to attract lazy people who consistently underestimate others--the kind that believe everyone else is an idiot and there is no way anyone else would see how little effort is involved in using the skills--then become surprised when the market is flooded with people who discovered exactly that.

The distinction between "crafting" and "gathering" in a strict MMORPG sense is that when you gather, you make money for using your skills. When you craft, the value is having those skills. If there are even a handful of crafters competing in a busy area, the value of having the skills will go down at an incredible rate because the work involved in actually using those skills is close to nothing.

That is unless, of course, all manufacturers make a collective pact in order to gouge people who don't have those manufacturing skills (in certain other MMORPGs, if a handful of players have a high-end recipe, they will do this), yet that's why even more people will train them if the skills are infinitely available. Its amazing to me how few people train trading skills instead.

Letouk Mernel
Caldari
Posted - 2008.05.14 15:03:00 - [83]
 

Originally by: Chainsaw Plankton
Originally by: Anubis Xian
Let people actually make unique products.


thats what I have been thinking... the question is how to release unique products... they wouldn't do so well with the market and the "<player name> modified <item name>" would get very cluttered, or we could do <item name> +n Twisted Evil


They could display the Meta level as a column in the market window. And then, your "unique" product that you improved by using only top of the line materials to make, would be displayed as:

<Item Name> ........ <Meta Level>
Sensor Booster I ... 3.2

Chomin H'ak
Integrated Takeovers
Posted - 2008.05.14 16:19:00 - [84]
 

I hate to suggest this, but the fact remains.

Remove insurance. You would see a more thought-out market. I don't advocate the removal, I'm just offering an answer to your question.

I think the 'I got it for free mentality' would soon dissipate, as they would base their gains off of actual profit/cost vs time.

Consider the miner that got ganked; his thoughts would run along the lines of: 'it cost me a hulk and an osprey to get these minerals, so they're worth 150M.'

Just a thought... let the flames commence.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2008.05.14 16:33:00 - [85]
 

Heh... want to bet that prices would actually go DOWN even more if insurance wouldn't exist ? Laughing

Shidhe
Minmatar
The Babylon5 Consortuim
Posted - 2008.05.14 17:10:00 - [86]
 

Problem with economy of scale is that small manufacturers (read - new players) would have problems dealing with the established ones. In RL, corner shops are often forced out of business by the big mega-stores. This is not a good idea for a game like EvE.

There is a problem, but the solution is not easy... How about compulsory training in accounting for all manufacturers (OK, kidding, but only just).

OK - (random string of words follows) - allow some economy of scale, but small producers could compensate by (for example) doing a mission for an R&D agent that would improve the ME of a given T2 BPC? Not something that someone who makes gazillions of T2 ships would do, but an occasional inventor / manufacturer might well find such a mission to improve that treasured 2-run Vaga BPC worthwhile. You could improve efficiency by either effort or money, but you have to do something to compete.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2008.05.14 17:20:00 - [87]
 

Originally by: Shidhe
Problem with economy of scale is that small manufacturers (read - new players) would have problems dealing with the established ones.

They already do, but they don't realize it Laughing

You only need to read this thread (then have a passing glance at Sci&Ind and New Citizens) to see just how pervasive the "minerals I mine are free" mentality really is.
As long as these "small time" manufacturers are permited to keep deluding themselves that they actually obtain profits, the sheer numbers of them hinder the "real" manufacturers from operating properly.

If the "small time manufacturer" would be driven out of the manufacturing game by the sudden realisation of the fact he's actually working at a loss, then the stage would be set for people doing "serious" manufacturing... while the smaller ones would either leave the marketplace for something more interesting to do, keep working at a loss (but at least they'd realize it, so their numbers would be severely diminished) or switch to a "smaller scale" market (like, say, ammo... profit margins on ammo are really high, but total profit per line is really low)... or just become retailers for the larger manufacturers.

The desire to shelter the "small time producer" could be likened to the desire to shelter the newbie that wanders into 0.0 in a tech 1 tier 2 frigate hoping to rat there or somesuch. We don't expect the "newbie" to survive there very long alone... but we somehow welcome "industry newbies" ?!?
Making the "game" harsher there too means that finally a manufacturer career would actually MEAN something, it would be something people would WORK for... not something for every Jack and Jane that don't have the first clue about what "profit" actually means.

Chomin H'ak
Integrated Takeovers
Posted - 2008.05.14 17:26:00 - [88]
 

Originally by: Akita T
Heh... want to bet that prices would actually go DOWN even more if insurance wouldn't exist ? Laughing



Heck yeah, I'll take that bet; if nothing else than to be the guy on the other end of the discussion. You don't think that after a brief drop that prices would climb back up?

On a side note, wouldn't that make Eve that much more brutal and exciting? I'll bet it would change the landscape for the better. But this is all merely speculation on my part. I may not understand the dynamics of the insurance payout.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2008.05.14 17:33:00 - [89]
 

Originally by: Chomin H'ak
Originally by: Akita T
Heh... want to bet that prices would actually go DOWN even more if insurance wouldn't exist ? Laughing

Heck yeah, I'll take that bet; if nothing else than to be the guy on the other end of the discussion. You don't think that after a brief drop that prices would climb back up?

Well, for starters, lost ship with no insurance means less ISK available after it pops, means less ISK you're willing to spend on a new ship... demand decreases if prices remain constant.
Also, no more insurance means no bottom cap for the basket price of minerals, means prices CAN go down if needed.
Combine both things... and bamf, instant price depression.
People that mine will keep on mining for a good while, so supply of minerals will not diminish so fast... after a while though, people will start to quit mining doing something else (ratting, missioning) as soon as they get those skills up... so in time, mineral prices will stabilize.

Yes, there will be fluctuations, but in the long run, prices for T1 goods will be going down compared to the current situation, miners will get even less income, mission-running will be rampant, PvP activity will be slightly stiffled (due to increase cost of losing one's ship) and so on and so forth.

SiJira
Posted - 2008.05.14 18:07:00 - [90]
 

refining would have to be changed to fix this

more importantly this could lead to some high end industrial content

if only there was more support for piratesYARRRR!!


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