Market Discussions

Not sure why you created this topic considering you've commented on a topic with the exact same topic: https://forums.eveonline.com/default.aspx?g=posts&t=360185&find=unread

But I might as well entertain you here as well.

The manufacturing tax introduced in Crius discourages more activity in manufacturing, contributing to the continued inflation the economy currently suffers from.

I've made my point, and will continue to discuss in the original thread as duplicate threads are unproductive.

I would think your estimation of ISK being more valuable, as the result of new sinks, is not quite right. If the only part of the puzzle that moved were faucets and sinks then you'd be closer to being correct. Keep in mind though, these new sinks will not consume the gain in ISK month over month. The money supply will continue to inflate.

When we examine what CCP did, they included ISK as consumable part of the building process. At first glance this new demand would seem to indicate a new 'higher value' for ISK, since its utility has been increased. But how might players react to this? Might they create even more ISK than they did before to compensate?

And what will happen to the value of other non-isk faucet activities? Reduced scrap would imply higher mineral prices, but lower production would counter that. Lower reprocessing would imply higher mineral prices, but increased yields from null will counter that.

Lower build costs in null and low will put even more pressure on high sec production which could push demand for high sec generated minerals lower. If mining and production are not worth the time in high sec, what's left? Shoot rats. That would result in even more monetary inflation.

If we examine each change on its own, we can come up with reasonable arguments of what this or that change may do, but frankly there are too many changes at once for anyone to come up with a wholistic argument that can't be punched full of holes by someone else.

And the most important thing to keep in mind is, how are some 500,000 subscribers ... (or is it really ~40,000 with alts) going to react to all of this and what will they do?

We can all make our long term bets, but no one should be surprised if they are wrong this time around.

Yes but you are placing too many unknown variables assuming their net direction, its too complex if you look at it that way. In economics there is a term "everything else unchanged". So I was mostly refereing to the impact of the new tax, which should decrease the net money supply (reduce inflation). The reaction to this, and I think its what ccp wants, is more plex sales and lower plex isk prices, but to what degree? Remember, more isk needed for manufacturing = less isk available to buy plex, or maybe it won't reach that far. We will see. What is clear thou is that many prices are going down today.

Another thing is one of the goals now for ccp is to increase risk appetite so that players move to lower sec areas, and one way to do this is to reduce the levels of isk in circulation (taxes), combined with lower profit margins (lower manufacturing times) etc.

This does not follow. Assuming you correctly predict this is a successful isk sink and there is a decrease in the expansion of the money supply, why does that drive PLEX sales? If my isk buys more, why do I want to PLEX for more isk if I am not doing so already or vice versa? My euro/dollar/pound gets me the same purchasing power as before. Nothing has changed unless there are other factors in play.



More isk required to manufacture across the board means nothing more than an increase in the cost of goods sold to the end consumer. It has zero effect on the margin of any item that wasn't supported by some artificial floor. Assuming everyone has to invest more isk per unit manufactured, in a month's time they'll have the same proportion of their earnings with which to purchase PLEX as they did before. As we discussed previously, less inflation means lower PLEX prices or PLEX prices not climbing as quickly as they might, along with all other goods in the market. Again, net zero after the shake-out, unless you consider other factors.



Again, a reduction in the overall money supply does not impact risk assessment. If you have 100isk to lose today and 90isk to lose tomorrow, but they both represent the same basket of potential goods, these are then equally tolerable or intolerable losses to the consumer. You're treating isk as a thing-in-itself, which is perhaps the case for a few players, but for the most part people who undock count their isk relative to purchasing power.

In the case of lower manufacturing times you're closer to the mark, but only in the case where the market was taking ample time to correct between peaks and troughs. In the case of most popular mods, this isn't the case, and a more swift reaction to demand is not bad for anyone involved. It allows producers to build whats in demand and receive their return on investment more quickly and it allows consumers to enjoy less time where a good is suffering from a shortage. Per the trader's angle, it could be that shortages will be harder to take advantage of, but it might also mean that gluts are more easily provoked and capitalized on. Certainly the role of the trader is to smooth curves and narrow margins in order to profit themselves and efficiently allocate capital to others, but this isn't a gut-shot to anyone.

About the first, it could be the case that the increase in isk relative value will lower plex prices and completely counter any demand increase it will probably be both, a decrease in price and an increase in sales in the long term, remember if ccp keeps the tax in place then we also have to consider what the effects will be one year from now.

About the second, more relative isk required as compared to the value of the raw materials as increase in the direct manufacturing cost via the tax means less capital avaliable, but this is in theory if the balances tilt to that end, which we cannot know, but based on the tax and not considering anything else then I think this is the more likely effect.

About the risk, now since it might be harder to make a living making stuff and just trading then players are forced to seek other means, the main one being exploration, but I don't know if it will get that far.

So yes, you are pointing to very good counter reactions, but in the end we just never know for sure.

You risk ending up being stuck with them, if a new patch nerfes the item you bought heaps of. Setting the item floor to 50% of mineral costs was a bit to much imo, 75% would have been better. (with 85-90% in 0.0)