These forums have been archived and are now read-only.

The new forums are live and can be found at https://forums.eveonline.com/

EVE General Discussion

 
  • Topic is locked indefinitely.
 

Plex hits 1b ISK in Jita

First post
Author
Vincent Athena
V.I.C.E.
#41 - 2015-08-07 16:52:33 UTC  |  Edited by: Vincent Athena
In economic theory there is something called Giffen good (good, as in "goods and services"). These are goods which have a reversed supply-demand curve. That is, an increase in price results in a decrease in supply. It is possible that the PLEX is a Giffen good. To see how this could be, first let me recast what I mean by "the price of the PLEX".

Consider how much Real Money I need to buy, say, 10 billion ISK via PLEX. As the ISK value of the PLEX increases, the price, in Real Money, of 10 billion ISK decreases. Normally one would expect this to increase the demand for PLEX. As the Real Money cost of 10 billion ISK drops, more players will opt to make the purchase. But if the PLEX is a Giffen good, then the reverse happens. The mechanism may be:

The number of people who would want a supercap is limited by the number of characters who have skills to fly them, not the super's price. Dropping the price of supers will have only a small effect on their demand. (I'm assuming a player does not want spare supers sitting about, they want most every one logged off in space with a pilot sitting in it.)

A player with little ISK can buy a super by using Real Money to buy PLEX, selling the PLEX for ISK and buying the super. As the ISK value of a PLEX increases, the number of PLEX the player need buy goes down. Increased ISK price leads to a reduced supply of PLEX. (Or, to put it another way, the decreasing price of ISK leads to decreasing demand for PLEX). This makes the PLEX a Giffen good.

A numerical example:

Say the ISK price of the PLEX increases by 10%. Any player deciding to make a big purchase now needs to buy 10% fewer PLEX. Lets say as a result of the better price, 5% more players decide to make such a purchase. Yes, the total players buying PLEX increases, and the total ISK bought increases, but as each now buys fewer PLEX, the total supply of PLEX goes down. Again, we have a Giffen good.

What this means for CCP: The increasing ISK value of the PLEX would reduce revenue, and hence is not in CCP’s best interest.

Know a Frozen fan? Check this out

Frozen fanfiction

Erin Crawford
#42 - 2015-08-07 17:01:37 UTC
Vincent Athena wrote:
...
What this means for CCP: The increasing ISK value of the PLEX would reduce revenue, and hence is not in CCP’s best interest.

which is why CCP is currently offering us a 10% PLEX safe.

"Those who talk don’t know. Those who know don’t talk. "

Kaivar Lancer
Doomheim
#43 - 2015-08-07 17:13:20 UTC
Not much we can do. PLEX holders have no reason to sell.

Now, if CCP introduced a regular tax or fee for holding a PLEX, we can expect PLEX to flood the market. The fee needn't be large, perhaps 0.01% of the median Jita value per day. People would be more compelled to only buy a PLEX when they need it, as opposed to hoarding it for no reason.
Kooshti
Sebiestor Tribe
Minmatar Republic
#44 - 2015-08-07 17:15:14 UTC  |  Edited by: Kooshti
Kaivar Lancer wrote:
Not much we can do. PLEX holders have no reason to sell.

Now, if CCP introduced a regular tax or fee for holding a PLEX, we can expect PLEX to flood the market. The fee needn't be large, perhaps 0.01% of the median Jita value per day. People would be more compelled to only buy a PLEX when they need it, as opposed to hoarding it for no reason.


no my rl money doesnt really get taxed for sitting around so neither should my plex Cool its like people investing in gold irl, plex is new eden gold
Vincent Athena
V.I.C.E.
#45 - 2015-08-07 17:21:34 UTC  |  Edited by: Vincent Athena
Kaivar Lancer wrote:
Not much we can do. PLEX holders have no reason to sell.

Now, if CCP introduced a regular tax or fee for holding a PLEX, we can expect PLEX to flood the market. The fee needn't be large, perhaps 0.01% of the median Jita value per day. People would be more compelled to only buy a PLEX when they need it, as opposed to hoarding it for no reason.

It's not "no reason". It's protection against continuing price rises, or as an investment.

Edit: Then I'd keep my PLEX on an alt account that has a zero wallet balance. Cannot get blood from a tulip.

Know a Frozen fan? Check this out

Frozen fanfiction

Tackninja
Brutor Tribe
Minmatar Republic
#46 - 2015-08-07 17:41:48 UTC
Quote:
no my rl money doesnt really get taxed for sitting around so neither should my plex its like people investing in gold irl, plex is new eden gold


Actually it does. It is a type of capital gains tax. But still, EVE is not "real" world. So them applying a tax is plausible and would potentially help lower PLEX costs.
Algarion Getz
Aideron Corp
#47 - 2015-08-07 18:17:56 UTC  |  Edited by: Algarion Getz
Kaivar Lancer wrote:
Not much we can do. PLEX holders have no reason to sell.

Now, if CCP introduced a regular tax or fee for holding a PLEX, we can expect PLEX to flood the market. The fee needn't be large, perhaps 0.01% of the median Jita value per day. People would be more compelled to only buy a PLEX when they need it, as opposed to hoarding it for no reason.

A fee pff, this is EVE not WOW. CCP should add a 30 day expiration timer to PLEX. When it reaches 0, the PLEX deletes itself and the EVE client plays a video of a smiling Hilmar, lighting a cigar with 20€ bill. This would end all the PLEX hoarding.
Tipa Riot
Federal Navy Academy
Gallente Federation
#48 - 2015-08-07 18:34:14 UTC
Demand exceeds supply ... price rises. So there is likely too much ISK in the game and too many players want to buy PLEX. The other explanation that the EvE players got poorer in RL does not sound plausible. Also I don't think a hypothetical decreasing number of players "favors" the ones who sell PLEX to fund their PvP.

I'm my own NPC alt.

Rain6637
NulzSec
#49 - 2015-08-07 18:34:47 UTC
suddenly I can't figure out how to edit my signature. I want to add the Giffen good post to it.
DaReaper
Net 7
Cannon.Fodder
#50 - 2015-08-07 19:29:18 UTC
TL;DR too much salt i am sure.. but my response to these is the same..

So?

You can make 1b isk in about 4 hours in a c4 wormhole. If you and another friend run it you can make more.

It really is not hat hard to make 1b isk.

OMG Comet Mining idea!!! Comet Mining!

Eve For life.

Mr Epeen
It's All About Me
#51 - 2015-08-07 20:13:42 UTC
DaReaper wrote:


It really is not hat hard to make 1b isk.


That's the problem right there, in my opinion.

Remember when a million was huge? I do.

I was over the moon when my wallet hit 100m. And I earned it. I didn't buy it from CCP.

Then came PLEX. CCP's answer to attracting all those millennials coming of age into the game. Now a billion is nothing. I feel barely adequate with my current worth of around 140b.

What a failed experiment PLEX turned out to be for actual gamers. Great for CCP, though, so it's here to stay. Unfortunately.

Mr Epeen Cool
Vortexo VonBrenner
Coldest Sea Sailing
#52 - 2015-08-07 20:25:40 UTC
Mr Epeen wrote:
I feel barely adequate with my current worth of around 140b.


You feel inadequate, yes? I see.
*scribble scribble
Tell me about your mother...







Nicolai Serkanner
Incredible.
Brave Collective
#53 - 2015-08-07 20:34:18 UTC
B0RG 0VERLORD wrote:
well i disagree,i think prices of plex will start to fall when supply and demand slopes,the amount of users buying will drop due to less people playing eve,numbers say we dropped 10000 members online in the last month(since fuzziesov),

so less people = less plex being bought

thanks



Funny though that so far, you, and all the other EvE is doomed sayers, have been wrong, because the price of PLEX has been increasing again and again.
Nicolai Serkanner
Incredible.
Brave Collective
#54 - 2015-08-07 20:35:58 UTC
Mr Epeen wrote:
DaReaper wrote:


It really is not hat hard to make 1b isk.


That's the problem right there, in my opinion.

Remember when a million was huge? I do.

I was over the moon when my wallet hit 100m. And I earned it. I didn't buy it from CCP.

Then came PLEX. CCP's answer to attracting all those millennials coming of age into the game. Now a billion is nothing. I feel barely adequate with my current worth of around 140b.

What a failed experiment PLEX turned out to be for actual gamers. Great for CCP, though, so it's here to stay. Unfortunately.

Mr Epeen Cool


You might feel adequate; doesn't mean you are.
La Rynx
School of Applied Knowledge
Caldari State
#55 - 2015-08-07 20:40:47 UTC
a some are getting closer...

not the value of plex is rising!
the value of isk is decreasing!

Atomic Virulent : "You can't spell DOUCHE. without CODE."

Hal Morsh
Doomheim
#56 - 2015-08-07 21:03:02 UTC  |  Edited by: Hal Morsh
The higher plex goes, the more I feel like spending 20$ on some space goodies.


Last time I did it I had a blast with all that isk.

Oh, I perfectly understand, Hal Morsh — a mission like this requires courage, skill, and heroism… qualities you are clearly lacking. Have you forgotten you're one of the bloody immortals!?

Vincent Athena
V.I.C.E.
#57 - 2015-08-07 21:07:30 UTC  |  Edited by: Vincent Athena
Rain6637 wrote:
suddenly I can't figure out how to edit my signature. I want to add the Giffen good post to it.

Your name at the top, forum settings.
B0RG 0VERLORD wrote:
well i disagree,i think prices of plex will start to fall when supply and demand slopes,the amount of users buying will drop due to less people playing eve,numbers say we dropped 10000 members online in the last month(since fuzziesov),

so less people = less plex being bought

thanks

I looked at eve-offline. The average number of players on-line, averaged over a week or more, has been constant at 21000 for over 6 weeks. There was no drop of 10,000 from the new sov. In fact, the steady decline we've been having all year came to an end when the new sov rules hit.

Know a Frozen fan? Check this out

Frozen fanfiction

Malcanis
Vanishing Point.
The Initiative.
#58 - 2015-08-07 21:09:04 UTC
At the end of the day, I think CCP are going to be confronted with the necessity of lowering their price point. It may seem counter-intuitive, but they're better off with 15 customers paying $10 each than they are with 10 customers paying $15 each. And not just a bit better - a lot better off.

"Just remember later that I warned against any change to jump ranges or fatigue. You earned whats coming."

Grath Telkin, 11.10.2016

Nicolai Serkanner
Incredible.
Brave Collective
#59 - 2015-08-07 21:19:48 UTC
Malcanis wrote:
At the end of the day, I think CCP are going to be confronted with the necessity of lowering their price point. It may seem counter-intuitive, but they're better off with 15 customers paying $10 each than they are with 10 customers paying $15 each. And not just a bit better - a lot better off.


Also ingame.
Tippia
Sunshine and Lollipops
#60 - 2015-08-07 21:21:33 UTC
Also, can we get the difference between “less” and “fewer” right, please?