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What Impact Does GDP Have On Eve Online?

Author
pajedas
Doomheim
#1 - 2016-11-01 14:32:09 UTC
Source: International Monetary Fund

In case you missed it, "Iceland is biggest looser in ppp ranking, down by 37 rank from 111th to 148th."

What impact (if any) does this have on our beloved game?

🐇

Terrorfrodo
Interbus Universal
#2 - 2016-11-01 14:40:31 UTC
I don't see why it should have any impact. CCP's revenue is coming from global customers, not from the handful of EVE players in Iceland. CCP should be quite insulated from the rest of Iceland's economy. A falling standard of living might even benefit them slightly because the (reportedly not too luxurious) salaries they pay their employees would be worth more in Iceland.

That said, afaik the seemingly high former GDP came exclusively from the banking sector, which was basically just a giant bubble and scam. That was never real money, so the lower GDP is just a return to reality.

.

Lasisha Mishi
Pandemic Horde Inc.
Pandemic Horde
#3 - 2016-11-01 14:49:19 UTC
keep in mind iceland is a small country compared to the US

it doesn't need as much money.
embrel
BamBam Inc.
#4 - 2016-11-01 15:28:36 UTC
I expect no impact.
Lower GDP could mean lower wages which could lead to either a) higher profits or b) more employees. However, in practice, you're not in the average market, but a niche where GDP-influence will be limited so that we won't notice anything at all.
Teckos Pech
Patriotic Tendencies
Goonswarm Federation
#5 - 2016-11-01 17:09:59 UTC
Wasn't there a presentation at Fanfest about how the price of oil had an impact on PLEX prices? That as oil prices dropped, the economy in Russia took a hit and Russian players turned to PLEX to keep their accounts active vs. spending RL cash which, comparatively speaking, became more valuable than ISK/PLEX?

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."--Friedrich August von Hayek

8 Golden Rules for EVE Online

Nana Skalski
Taisaanat Kotei
#6 - 2016-11-01 17:20:33 UTC
Last time I have been learning about economy I have seen that resources like oil and massive dependency on its price for government can cause even military coup.

There was nothing about dependency on online game however, and Iceland have no standing army, so you can sleep peacefully.
Falin Whalen
GoonWaffe
Goonswarm Federation
#7 - 2016-11-01 18:29:14 UTC
Nana Skalski wrote:
Last time I have been learning about economy I have seen that resources like oil and massive dependency on its price for government can cause even military coup.

There was nothing about dependency on online game however, and Iceland have no standing army, so you can sleep peacefully.

So no Icelandic spring? Wait, that sounds terrible for the Icelanders. P

"it's only because of their stupidity that they're able to be so sure of themselves." The Trial - Franz Kafka 

Danixex Gosu
Burning Skies
Apocalypse Now.
#8 - 2016-11-01 18:37:37 UTC
Total GDP can be a misleading concept. What you really want to look at is GDP per capita, which shows the average GDP per person in said country.

I'm an economist.
Khergit Deserters
Crom's Angels
#9 - 2016-11-01 20:37:22 UTC
Teckos Pech wrote:
Wasn't there a presentation at Fanfest about how the price of oil had an impact on PLEX prices? That as oil prices dropped, the economy in Russia took a hit and Russian players turned to PLEX to keep their accounts active vs. spending RL cash which, comparatively speaking, became more valuable than ISK/PLEX?

That's really interesting. So, an economic downturn somewhere means players there spend ISK instead of RL cash to stay subscribed. CCP makes less cash income.

At the same time, ISK leave the in-game economy. (The PLEXes were bought with ISK, now they've been spent, so the ISK are gone from the game economy). That should have a deflationary effect on the in-game economy, right? So prices for goods should go down. Exception: Prices for PLEX should go up. Because of the higher demand for them by buyers from the country with the downturn.

Therefore, CCP has to provide us with constantly updated statistics on the player base, by percent per country. So we can watch RL world economic indicators, and be able to predict the effects on the in-game market. I can't believe we never demanded this before now.
Chopper Rollins
hahahlolspycorp
Brave Collective
#10 - 2016-11-01 21:22:24 UTC
lol IMF



Goggles. Making me look good. Making you look good.

Gadget Helmsdottir
Gadget's Workshop
#11 - 2016-11-01 21:26:36 UTC  |  Edited by: Gadget Helmsdottir
Khergit Deserters wrote:
Teckos Pech wrote:
Wasn't there a presentation at Fanfest about how the price of oil had an impact on PLEX prices? That as oil prices dropped, the economy in Russia took a hit and Russian players turned to PLEX to keep their accounts active vs. spending RL cash which, comparatively speaking, became more valuable than ISK/PLEX?

That's really interesting. So, an economic downturn somewhere means players there spend ISK instead of RL cash to stay subscribed. CCP makes less cash income.

At the same time, ISK leave the in-game economy. (The PLEXes were bought with ISK, now they've been spent, so the ISK are gone from the game economy). That should have a deflationary effect on the in-game economy, right? So prices for goods should go down. Exception: Prices for PLEX should go up. Because of the higher demand for them by buyers from the country with the downturn.

Therefore, CCP has to provide us with constantly updated statistics on the player base, by percent per country. So we can watch RL world economic indicators, and be able to predict the effects on the in-game market. I can't believe we never demanded this before now.



Um... The ISK for a PLEX is paid to a PLAYER, so it doesn't leave the economy, it just moves around a bit.

The only way for ISK to leave the economy is through a sink (NPC station, Industry, reprocessing tax) or for the account holding ISK to never log in again.

--Gadget

Work smarter, not harder. --Scrooge McDuck, an eminent old-Earth economist

Given an hour to save New Eden, how would respected scientist, Albertus Eisenstein compose his thoughts? "Fifty-five minutes to define the problem; save the galaxy in five."

pajedas
Doomheim
#12 - 2016-11-02 01:11:47 UTC
Danixex Gosu wrote:
Total GDP can be a misleading concept. What you really want to look at is GDP per capita, which shows the average GDP per person in said country.

I'm an economist.

Title does have GDP as a starting point, however I said, "ppp".

GDP (Gross Domestic Product) is the total market value of all final goods and services produced in a country in a given period. Each country reports its data in its own currency. To compare the data, each country's statistics must be converted into a common currency. The two most common methods to convert GDP into a common currency are nominal and purchasing power parity (PPP).

Nominal GDP estimates are commonly used to determine the economic performance of a whole country or region, and to make international comparisons. It is the original concept of GDP. In Nominal method, market exchange rates are used for conversion. It does not take into account differences in the cost of living in different countries. Fluctuations in the exchange rates of the country's currency may change a country's ranking from one year to the next, even though they often make little or no difference to the standard of living of its population.

PPP basis arguably more useful when comparing differences in living standards between nations. A haircut in New York is more expensive than in Lima; the price of a taxi ride of the same distance is higher in Paris than in Tunis; and a ticket to a cricket game costs more in London than in Lahore. PPP is an exchange rate at which the currency of one country is converted into that of the second country in order to purchase the same volume of goods and services in both countries. If a hamburger is selling in London for £2 and in New York for $4, this would imply a PPP exchange rate of 1 pound to 2 U.S. dollars. PPP exchange rates are relatively stable over time. Drawbacks of PPP is that PPP is harder to measure than nominal.

Out of 190 countries/economies, 173 have higher GDP in PPP basis and 16 have higher in nominal. For United States both are identical. 22 economies has higher ppp values by 3-4 times.

South Sudan has highest difference between PPP and nominal gdp calculation. GDP (PPP) of South Sudan is 9 times larger than GDP (nominal). South Sudan is followed by Myanmar (4.2) and India (3.8). This value is lowest for Switzerland (0.73).

There is a large gap between nominal and PPP based GDP in emerging market and developing countries. But for advanced countries, difference is much closer. Out of 16 economies which has ppp to nominal ratio is less than one (i.e, ppp value is less than nominal), 8 are among 14 richest and 11 are among 25 richest economies in nominal basis.

~StatisticsTimes.com

🐇

Teckos Pech
Patriotic Tendencies
Goonswarm Federation
#13 - 2016-11-02 18:15:14 UTC
Khergit Deserters wrote:
Teckos Pech wrote:
Wasn't there a presentation at Fanfest about how the price of oil had an impact on PLEX prices? That as oil prices dropped, the economy in Russia took a hit and Russian players turned to PLEX to keep their accounts active vs. spending RL cash which, comparatively speaking, became more valuable than ISK/PLEX?

That's really interesting. So, an economic downturn somewhere means players there spend ISK instead of RL cash to stay subscribed. CCP makes less cash income.

At the same time, ISK leave the in-game economy. (The PLEXes were bought with ISK, now they've been spent, so the ISK are gone from the game economy). That should have a deflationary effect on the in-game economy, right? So prices for goods should go down. Exception: Prices for PLEX should go up. Because of the higher demand for them by buyers from the country with the downturn.

Therefore, CCP has to provide us with constantly updated statistics on the player base, by percent per country. So we can watch RL world economic indicators, and be able to predict the effects on the in-game market. I can't believe we never demanded this before now.


Buying PLEX with ISK is not an ISK sink. It just goes from one pilot's wallet to another pilot's wallet.

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."--Friedrich August von Hayek

8 Golden Rules for EVE Online

voetius
Grundrisse
#14 - 2016-11-02 18:19:56 UTC
Danixex Gosu wrote:
Total GDP can be a misleading concept. What you really want to look at is GDP per capita, which shows the average GDP per person in said country.

I'm an economist.


What about GDP by decile then? Comparing GDP growth to GDP by decile over time in some countries can be an interesting exercise.
Aatch Bland
Caldari Provisions
Caldari State
#15 - 2016-11-02 22:11:18 UTC
As people have already said, CCP is only based in Iceland, but is effectively a global company. If the Icelandic economy tanked so badly that it couldn't support a software company, CCP would probably just relocate to one of it's other offices. They have 2 in the UK, one in the US, and one in China, as well as the headquarters in Iceland.
pajedas
Doomheim
#16 - 2016-11-03 02:03:43 UTC
Aatch Bland wrote:
As people have already said, CCP is only based in Iceland, but is effectively a global company. If the Icelandic economy tanked so badly that it couldn't support a software company, CCP would probably just relocate to one of it's other offices. They have 2 in the UK, one in the US, and one in China, as well as the headquarters in Iceland.

So, you're saying it has no impact on the game?

🐇

Teckos Pech
Patriotic Tendencies
Goonswarm Federation
#17 - 2016-11-03 05:18:27 UTC
Finally found the video.....

https://www.youtube.com/watch?v=7NlZUQVVqhc&app=desktop

Basically, the success of fracking => plex prices going up. P

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."--Friedrich August von Hayek

8 Golden Rules for EVE Online

Nana Skalski
Taisaanat Kotei
#18 - 2016-11-03 08:26:07 UTC  |  Edited by: Nana Skalski
Now you will no longer need PLEX to play EVE. Forever. P

I wonder how much this perpective will influence PLEX prices.
Khergit Deserters
Crom's Angels
#19 - 2016-11-03 23:25:23 UTC  |  Edited by: Khergit Deserters
Gadget Helmsdottir wrote:
Khergit Deserters wrote:
Teckos Pech wrote:
Wasn't there a presentation at Fanfest about how the price of oil had an impact on PLEX prices? That as oil prices dropped, the economy in Russia took a hit and Russian players turned to PLEX to keep their accounts active vs. spending RL cash which, comparatively speaking, became more valuable than ISK/PLEX?

That's really interesting. So, an economic downturn somewhere means players there spend ISK instead of RL cash to stay subscribed. CCP makes less cash income.

At the same time, ISK leave the in-game economy. (The PLEXes were bought with ISK, now they've been spent, so the ISK are gone from the game economy). That should have a deflationary effect on the in-game economy, right? So prices for goods should go down. Exception: Prices for PLEX should go up. Because of the higher demand for them by buyers from the country with the downturn.

Therefore, CCP has to provide us with constantly updated statistics on the player base, by percent per country. So we can watch RL world economic indicators, and be able to predict the effects on the in-game market. I can't believe we never demanded this before now.



Um... The ISK for a PLEX is paid to a PLAYER, so it doesn't leave the economy, it just moves around a bit.

The only way for ISK to leave the economy is through a sink (NPC station, Industry, reprocessing tax) or for the account holding ISK to never log in again.

--Gadget

Yeah, but...! But... OK, you're exactly right. Smile

Haven't watched all of the fanfest speech yet, but can we say:
-If some players now have less RL cash, will stay subbed by buying PLEX with ISK, rather than paying cash for subscriptions.
-To buy the PLEX, they have to generate more ISK.
-The additional ISK in the game economy will cause price inflation.
?

Then again, we're just a few days from Alpha clones and FTP. Some people or chars won't need either RL cash or ISK=PLEXes to play. Thoughts on those economy effects, ye guys?
Vaerah Vahrokha
Vahrokh Consulting
#20 - 2016-11-04 10:07:47 UTC
IMF is not a neutral third party vs Iceland and there are reasons for IMF to put pressure on a country that managed banksters in a way that is seen as "inconvenient" to finance brass.
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