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Player Owned Customs Offices: Math, Markets and Design Problems

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Author
pmchem
Brutor Tribe
Minmatar Republic
#1 - 2011-11-14 07:00:58 UTC  |  Edited by: pmchem
I went through and got some numbers on sisi regarding highsec CO changes and nullsec POCOs. Highsec COs have indeed had all their import/export taxes doubled. The sisi export tax rate is 200 isk/m3 or 1200 isk/u for p3's (like robo), and 12 isk/m3 or 18 isk/u for p2's (like coolant). This corresponds to a "10%" tax rate in highsec on sisi. The sisi tax rate is essentially a joke number: it's based on a reference value that doesn't place any importance on the "market value" or "maximizing profit" aspects of the game at all. If we assume the p3 is Robotics (70k isk/u) and that the p2 (say, Mech Parts) is worth 10k isk/u, then the p3 tax rate is actually 1.7% and the p2 tax rate is a laughable 0.18% based on market values.

With current market prices, a POCO costs about 100m isk to fully deploy/upgrade (including BPC LP value). Unfortunately, the tax rate can not be set above 100%. Since the highsec values correspond to "10%", just imagine highsec x10 as the highest tax you can set on a POCO. If you have reds set to 100% tax rates and the reds are exporting p1s or p2s, they aren't going to care about the miniscule tax. On p3's a 100% tax rate is actually a fairly sizable hit, but not enough to stop a user if they don't have other easily accessible options, because what the heck, "my time is free". A 100% tax rate nullsec POCO is almost certainly more profitable than a highsec POCO doing extraction just because of nullsec abundancies. p1 extraction in nullsec is laughably cheap even at "100%" POCO tax rate. It's about 0.912 isk/u, which if you're extracting chiral corresponds to about a .12% market tax rate. It can essentially be ignored.

What does this mean for the overall market? Let's look at daily Jita volumes and assume an average "20%" tax rate for nullsec/lowsec POCOs. If half the PI supply comes from nullsec/lowsec, we can guesstimate how much prices should rise after an equilibrium is reached -- when POCOs have been deployed on all planets players have interest in, and when the market has evened out so that producers are making about as much profit (in isk/u) as they are now. Yeah, not totally realistic, but w/e it makes for an easier estimating. The rise is not that much, only about 1200 isk/u based on pure export value ( surprised? :math: ) for Robo, plus whatever trickle-up effect you get from more expensive p1/p2 supply and import costs. Call it about 2,000 isk/u overall. In short, if nullsec/lowsec taxes are not pretty much all set to 100%, the effect JUST FROM TAX CHANGES will not be a big deal. If everyone sets POCO tax rates to 100%, the effect is more amusing -- over a 10% rise in price -- but since most p3s are made in highsec that scenario is unrealistic. People buying PI goods to build POCOs and the disruption as POCOs are set up or fought over will have a much greater near-term impact on the PI market. Since PI is boring, it's likely that the near-term spike could be quite long lived. But any changes in price should be attributed to the setup and fighting over POCOs themselves, not to tax changes.

Can an alliance make isk from taxing POCOs in their region? Let's assume it supplies the entire Jita market with enriched uranium. That's about 1m units/day. At 100% tax rates (heh), that would be about 180m isk/day for the alliance, or 5.4b/month. That's a ridiculous scenario and it's still only a fraction of a tech moon. Basically, POCOs are terrible for alliance income until their handling of taxes is SUBSTANTIALLY changed by CCP, or the reference values for taxes reset way, way upward. Oh, and if your "20%" tax rate POCO has users exporting 100,000 units of p2s PER DAY (heh), it will still take a month to recoup costs of putting it there in the first place.

WHAT CAN BE DONE? Well, as I mentioned in two older, less-wordy posts:
https://forums.eveonline.com/default.aspx?g=posts&m=208048#post208048
https://forums.eveonline.com/default.aspx?g=posts&m=224363#post224363
CCP needs to give the POCO owners greater control over the exact taxes. I would recommend the following:

FIRST: reset the default "reference tax values" to represent full Winter 2011 market value of the average good for that tier, instead of the fantasy values they currently have. This would have two immediate effects: increasing the isk paid by users of highsec COs (an increase of an isk SINK, which your economist should love), and increasing the range of isk values over which POCOs can be taxed. This is the easy, no-brainer option.

SECOND: give the POCO owner the ability to change those "reference tax values", per tier (p0/p1/p2/p4 goods). This is an expansion of the current fairly nice POCO configuration menu and would allow POCO owners total flexibility in setting their tax rates, saving future game balance headaches. Just let the players handle the market, as it should be. Note: if allowing different reference values would screw up your interface for displaying tax rates to the user, then allow tax rates over 100% (and adjust default reference values!).

If CCP does not do this, there are SERIOUS FUTURE GAME DESIGN PROBLEMS which will crop up:
Problem 1: nobody likes POCOs. Corporate joes bug their corp CEO or alliance CEO to put POCOs up, because PI is important to some poor people. However, the corps and alliances hate the things because they can not provide good income, have to be deployed in dozens/hundreds of places, and sometimes get shot at. They are Not Fun.
Problem 2: nobody cares about POCOs. If they don't generate corp/alliance income, and if they're trivial to replace, nobody is going to bother to reinforce them, or defend/kill them when they are somehow reinforced.

It's clear POCOs are going to be the fundamental interface between Eve and DUST 514. Please don't screw up their economics, or DUST will fail. That's something CCP cannot afford. Please change POCOs before release.

https://twitter.com/pmchem/ || http://community.eveonline.com/news/dev-blogs/community-spotlight-garpa/ || Goonswarm Economic Warfare Cabal

Akrasjel Lanate
Lanate Industries
#2 - 2011-11-14 09:27:38 UTC
Yea, right.

CEO of Lanate Industries

Citizen of Solitude

Kirin Falense
Some names are just stupid
#3 - 2011-11-14 11:24:02 UTC  |  Edited by: Kirin Falense
Ive come to similar conclusions....
Usurpine
Imperial Shipment
Amarr Empire
#4 - 2011-11-14 16:52:31 UTC
Its ok for me if DUST will fail. I dont want buy a console for playing it anyway.
KarmaHotelLobby
Aliastra
Gallente Federation
#5 - 2011-11-14 21:54:16 UTC
Any reason not to have an interface giving 4 options.

Isk per p1
Isk per p2
Isk per p3
Isk per p4

Set a flat isk amount, with ultimate flexibility, no need for percentages because they make no sense anyway?
Hamatitio
State Protectorate
Caldari State
#6 - 2011-11-14 22:20:38 UTC
tl;dr please? :)
corestwo
Goonfleet Investment Banking
#7 - 2011-11-14 23:11:12 UTC
Usurpine wrote:
Its ok for me if DUST will fail. I dont want buy a console for playing it anyway.


Don't be shortsighted. This affects Eve, even if DUST never comes into being. Ignore the bits about DUST if you want - the point is that for an "alliance level income source", these are laughable at best.

This post was crafted by a member of the GoonSwarm Federation Economic Cabal, the foremost authority on Eve: Online economics and gameplay.

fofofo

Mal Nina
The Red Circle Inc.
Ministry of Inappropriate Footwork
#8 - 2011-11-14 23:31:41 UTC
Just to build on the numbers a bit.

Assumptions:
2% tax on PI product value (upped from 1.7 as given in earlier post)
150 mil a month in product creation (2 charactors, 4/5 skills on both)
10 planets
20 corp members doing PI.

Costs 100 mil for each POCO to install.

The math.

2% of 150 mil is 3 mil. 3 mil x 20 players is 60 mil a month in taxes generated. Cost was 1 Bil to install, that gives you a ROI of 16.67 months. So for you to start generating a profit is 17 months. Does not sound like a good idea to me for any small corperation. Even larger ones may suffer.

So if this is all about putting the power back in the hands of the players and giving something for corperations to make money from your wrong. Your own numbers do not justify it except for large (huge) alliances that have a fairly defendable area and can run operations 24 hours a day to defend thier intial investment. I know there is a 24 hour timer, however putting these into reinforcement is going to be just the start. At some point someone else will come along to destroy the ones coming out of reinforcement and the owning corperation will just not have enough people on to do anything about it. its just too juicy a target and too costly for owning corps not to.

So if this was to give small corps/alliances a chance at a pot of gold you have missed your mark. There is no gold at the end of this rainbow, just misery and missed opportunity.


It does however give the new NAGA and Talos something to shoot at Sad and provides a unique niche for these ships.
Jim Hooknose
Imperial Academy
Amarr Empire
#9 - 2011-11-15 00:14:01 UTC
A goon posted this so somehow it is a scam. I feel like I should check my wallet after reading it.
Tau Cabalander
Retirement Retreat
Working Stiffs
#10 - 2011-11-15 00:59:45 UTC
If you want changes, you'd likely be better off posting in the test server forum where it might get read by a dev.
pmchem
Brutor Tribe
Minmatar Republic
#11 - 2011-11-15 04:16:59 UTC
Tau Cabalander wrote:
If you want changes, you'd likely be better off posting in the test server forum where it might get read by a dev.


I posted links to the this discussion there in two POCO threads.

Regarding isk per p1, p2, etc comment -- I think the percents will be staying. It's because you can set taxes at different rates based on standings red/blue/orange/etc. Plus when you show info on a POCO it tells you your tax "rate", not rate per p1, rate per p2, etc. An interface thing. But, my second suggestion (allow user customization of reference value for p1, p2, etc) would have the same solution you desire.

https://twitter.com/pmchem/ || http://community.eveonline.com/news/dev-blogs/community-spotlight-garpa/ || Goonswarm Economic Warfare Cabal

trianna Ekanon
The Spawning Pool
#12 - 2011-11-15 08:50:27 UTC  |  Edited by: trianna Ekanon
It never ceases to amaze me just how terrible people in this game can be at something with even the simplest of mechanics like PI. I suppose the key to being profitable with POCO's is simply not having idiots on your planet. Hell my single PI account would pay for the damn thing in a month and a half.

Additionally you completely miss the issues with PI taxation. ITs nto a question of being able to tax it at appropriate percentages or even having a vast amount of control over that, its the issue that the PI markets in themselves are remarkably tiny.

Demand needs to be dramatically increased in order to make POCO's an attractive investment to large 0.0 alliances. As it stands theres too little room in the PI markets where the spreads have become exceedingly slim.
Via Shivon
#13 - 2011-11-15 10:56:00 UTC
if tis to expensive for my alliance we will set them up with the corp, if its still to expensive ill buy them myself and earn the tax :D

3b investment for 6 planets i get in 3 weeks PI at the current high prices
pmchem
Brutor Tribe
Minmatar Republic
#14 - 2011-11-15 22:12:13 UTC
With today's blog announcing Interbus COs going up in place of all current lowsec/nullsec COs, POCOs just became an even worse thing for their owners. They have to compete with Interbus CO tax rates (the new 'standard'). Since that rate is low and the cost of putting up a POCO is a few months of taxes (at least), killing the Interbus COs is pretty much a form of griefing to whoever lives in that space. Any local resident would prefer an Interbus CO over putting up their own, given the current taxation schemes and POCO costs.

Regarding PI usage in general -- yes PI usage needs to be expanded but that is not the topic of this thread. This thread is about how, given the current market, POCO taxation options are absolutely terrible and will lead to players not enjoying this new game feature, at all.

https://twitter.com/pmchem/ || http://community.eveonline.com/news/dev-blogs/community-spotlight-garpa/ || Goonswarm Economic Warfare Cabal

Scrapyard Bob
EVE University
Ivy League
#15 - 2011-11-16 06:42:06 UTC
Tau Cabalander wrote:
If you want changes, you'd likely be better off posting in the test server forum where it might get read by a dev.


Actually, you'd be better off posting them in the most recent POCO thread, rather then burying the feedback in some random S&I forum thread.
trianna Ekanon
The Spawning Pool
#16 - 2011-11-16 07:01:11 UTC
pmchem wrote:
With today's blog announcing Interbus COs going up in place of all current lowsec/nullsec COs, POCOs just became an even worse thing for their owners. They have to compete with Interbus CO tax rates (the new 'standard'). Since that rate is low and the cost of putting up a POCO is a few months of taxes (at least), killing the Interbus COs is pretty much a form of griefing to whoever lives in that space. Any local resident would prefer an Interbus CO over putting up their own, given the current taxation schemes and POCO costs.

Regarding PI usage in general -- yes PI usage needs to be expanded but that is not the topic of this thread. This thread is about how, given the current market, POCO taxation options are absolutely terrible and will lead to players not enjoying this new game feature, at all.



you're missing the point, if PI is expanded into a widespread and competitive market, suddenly justifying installing and fighting over the newly available tax revenue can become a reality.

Right now theres too few opportunities to actually create a sizeable tax revenue spread across many tens of thousands of planets.

Think of it like research slots, thered be no reason to make research poses if there were enough station slots to go around. Sae for invention and bpo copying.
electrostatus
Center for Advanced Studies
Gallente Federation
#17 - 2011-11-16 15:54:50 UTC
I'm currently looking at the tax system right now so I can update my profit calculator and... I'm not seeing much of a difference on sisi compared to what it is now and I'm not seeing where the settable percent comes into play. If you want to see how the taxes will affect prices, my program does allow you to change the tax rate. Can't do percents right now though, but can take any number you give it.

Asteroid Timer: Know exactly when that roid depletes! PI Profit Calculator: calculates your profits and taxes of any PI product depending on how you built them!

Quinc4623
Space Explorers Federation
#18 - 2011-11-16 16:26:45 UTC
I think the main reason one might need a POCO is just to make use of a planet at all. Doing 1 500m3 launch from the command center at a time is entirely impractical, but if you have control over a lot of 0.0 space you'll want to actually take advantage of the planets there. In a large enough alliance or corporation with enough PI users it can easily be worth while with a proper program of shared PI profits. But yeah, the taxes bit doesn't sound like it would be very worth it by itself.

I have a number of very profitable planets in 0.2 systems and quite frankly I'm going to have to abandon them on the 28th since I don't see anyone maintaining POCOs in low sec. There are gangs that gank random POS and so there will be those who gank POCO, and only those related to an organized PI scheme will be defended or replaced, and those might be blocked off to outsiders, (and more likely in null than low).

Quite frankly I'm worried about how this will affect the costs of having a POS as everyone will rely on high sec for all their PI, which plain and simply don't give nearly as much actual Planetary Goods.
pmchem
Brutor Tribe
Minmatar Republic
#19 - 2011-11-16 22:57:35 UTC
trianna Ekanon wrote:
pmchem wrote:
With today's blog announcing Interbus COs going up in place of all current lowsec/nullsec COs, POCOs just became an even worse thing for their owners. They have to compete with Interbus CO tax rates (the new 'standard'). Since that rate is low and the cost of putting up a POCO is a few months of taxes (at least), killing the Interbus COs is pretty much a form of griefing to whoever lives in that space. Any local resident would prefer an Interbus CO over putting up their own, given the current taxation schemes and POCO costs.

Regarding PI usage in general -- yes PI usage needs to be expanded but that is not the topic of this thread. This thread is about how, given the current market, POCO taxation options are absolutely terrible and will lead to players not enjoying this new game feature, at all.



you're missing the point, if PI is expanded into a widespread and competitive market, suddenly justifying installing and fighting over the newly available tax revenue can become a reality.

Right now theres too few opportunities to actually create a sizeable tax revenue spread across many tens of thousands of planets.


No, I'm not missing the point. My post and analysis is based on a specific set of data: reality. Current proposals and test server data, current game mechanics, current market consumption of PI goods. I feel like you're some incognito CCP dev going "no just wait, if the PI market is expanded everything will be ok I promise!" Well, that's nice, and I realize that POCOs will be more attractive if PI usage is greatly expanded and PI becomes a higher isk volume market.

Right now, it's not. Deal with it.

https://twitter.com/pmchem/ || http://community.eveonline.com/news/dev-blogs/community-spotlight-garpa/ || Goonswarm Economic Warfare Cabal

JitaJane
Science and Trade Institute
Caldari State
#20 - 2011-11-17 20:41:22 UTC
So POCOS are not a good investment for Null mega alliances but could be worth it to smaller alliances/ renters. Working as planned.

90% of of the time my posts are about something I actually find interesting and want to learn more about. Do not be alarmed.

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