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The real reason PLEX is so expensive

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Author
Divine Entervention
Doomheim
#61 - 2014-04-19 00:47:11 UTC  |  Edited by: ISD Ezwal
Tippia wrote:
Divine Entervention wrote:
It could also very well increase PLEX supply
Explain why people would buy something they can't use.
Explain how the price would keep going up if they do.

*Snip* Please refrain from personal attacks. ISD Ezwal.


Because at the moment they might believe they could potentially use it.

On the upswing of the price rise, people could be enticed into purchasing PLEX from ccp hoping to sell it for it's at the moment higher worth.

If the price were going up, the price would keep going up if they're being bought, resulting in PLEX sellers continuing to try and get more worth out of the PLEX.

*Snip* Removed reply to an edited out part of the quoted post. ISD Ezwal.
Gully Alex Foyle
The Scope
Gallente Federation
#62 - 2014-04-19 00:49:43 UTC
Divine Entervention wrote:
Gully Alex Foyle wrote:
As Tippia mentioned, high ISK per PLEX could, if anything, reduce PLEX supply, not raise it.



Yea, it could. I never said it could not. It could also very well increase PLEX supply by more people having bought it hoping to get in on the higher value only to find there aren't enough buyers at the present time to satisfy their attempt at making as much isk they were hoping to, deciding to hold onto it for the potential of fulfilling their initially desired amount of isk.

possibility

That's way too complicated for your typical PLEX buyer, a guy that dishes out 20 bucks because he just wants to play the darn game without the hassle of grinding PVE or setting up an ISK-making toon or speculating on PLEX futures.

Make space glamorous! Is EVE dying or not? Ask the EVE-O Death-o-meter!

Divine Entervention
Doomheim
#63 - 2014-04-19 00:51:45 UTC
Gully Alex Foyle wrote:

That's way too complicated for your typical PLEX buyer, a guy that dishes out 20 bucks because he just wants to play the darn game without the hassle of grinding PVE or setting up an ISK-making toon or speculating on PLEX futures.


Yes, this opinion about the intelligence level of other EvE players is a very valid opinion you are allowed to have. I'm certain in some instances it is correct.
Tippia
Sunshine and Lollipops
#64 - 2014-04-19 00:53:43 UTC  |  Edited by: ISD Ezwal
Divine Entervention wrote:
Because at the moment they might believe they could potentially use it.
If the price were going up, the price would keep going up if they're being bought
But that's not what I was asking.
I was asking how do you explain that the price goes up when they aren't being bought.

If your irrationality is in effect, the price must go down, and yet it doesn't. You need to explain this.
It would also be nice if you could explain how people can be this irrational for years on end, but that's slightly besides the point.

*Snip* Removed reply to an edited out part of the quoted post. ISD Ezwal.
Adoris Nolen
Sama Guild
#65 - 2014-04-19 06:10:23 UTC
Didn't bother to read entire threadnaught; but the real reason is:

IRL ECONOMY you damn ding bats.
Josef Djugashvilis
#66 - 2014-04-19 06:36:43 UTC
I have been paying for the game by annual sub since 2007 and as far as I can remember the price has never gone up.

So if CCP are making a money grab, they are very bad at it.

This is not a signature.

Jarod Garamonde
Jolly Codgers
Get Off My Lawn
#67 - 2014-04-19 10:45:49 UTC
The real reason PLEX is so expensive?

Answer: because F**K botters and ISObox miners, that's why.

That moment when you realize the crazy lady with all the cats was right...

    [#savethelance]
Adunh Slavy
#68 - 2014-04-19 14:29:56 UTC
Stop buying PLEX with ISK, then you don't have to worry. The time you spend in game, to earn enough ISK to pay for a month of game play, you could instead do a few extra hours of real life work, get $99 and pay for an entire year of game play.

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.  - William Pitt

Val'Dore
PlanetCorp InterStellar
#69 - 2014-04-19 16:01:47 UTC
Tippia wrote:
So no, CCP very obviously does not benefit from higher prices. Instead, they benefit from lower prices. Exactly why they do so is hardly rocket surgery.


Which is only technically true once the number of accounts that depend on PLEX surpasses the number of PLEX in the supply. An account deciding to forgo PLEXing that month due to prices won't affect CCP in the slightest.

So as long as there are any on the market anywhere, CCP isn't losing anything. Which will never happen so long as CCP continues to make them available.

Probably the most obvious thing you have overlooked Tips, is the RMT angle. PLEX being more expensive makes the buying of ISK that much more desirable.

Bottom line, CCP trying to keep the prices of PLEX low are only going to hurt themselves. It is in nobody's best interest for CCP to do price fixing... except maybe the people who convert ISK into game time, but they already decide how much they value PLEX... nobody has as much control over it as they do.

Star Jump Drive A new way to traverse the galaxy.

I invented Tiericide

Tippia
Sunshine and Lollipops
#70 - 2014-04-19 16:25:47 UTC
Val'Dore wrote:
Which is only technically true once the number of accounts that depend on PLEX surpasses the number of PLEX in the supply. An account deciding to forgo PLEXing that month due to prices won't affect CCP in the slightest.

So as long as there are any on the market anywhere, CCP isn't losing anything. Which will never happen so long as CCP continues to make them available.
CCP start losing the instant an account closes down, because it means either means a direct reduction in income or a reduction in demand for income-generating PLEX.

Quote:
Probably the most obvious thing you have overlooked Tips, is the RMT angle. PLEX being more expensive makes the buying of ISK that much more desirable.
No, I haven't overlooked it. It just falls into the category of “they were desirable at a quarter the price”. Sure, a higher PLEX price puts higher pressure on RMTers but you still have to weigh that benefit against the lost income from having fewer subscribers since, as noted, there's very little to suggest that higher ISK prices lead to more sales.

Quote:
Bottom line, CCP trying to keep the prices of PLEX low are only going to hurt themselves.
Weeell… no. They hurt legitimate ISK producers more than anyone. I suppose that the increased server load and the amount of card fraud could count as being hurt too, but again, it lets them keep more customers and there's actually more reasons for people to buy PLEX.

Still, yes, your general conclusion is correct: the best for everyone is if CCP don't price fix at all. Afaik, they don't either, they mainly try to smooth out drastic changes. Also, I should suggest that you don't read too much into “benefit from lower prices” — it doesn't mean they'd prefer it if PLEX were 90M ISK, but that they're probably happier if it sits at 600 than 700. It may be written as a general rule but there is indeed a reductio ad absurdum problem in there.
Doc Fury
Furious Enterprises
#71 - 2014-04-19 16:34:12 UTC  |  Edited by: Doc Fury
Assuming for a minute that PLEX are being purchased as an investment (as has been hinted at previously), it would be in CCP's best interest to keep prices low as investors in most commodities do not hoard or hold when prices are high.

There's a million angry citizens looking down their tubes..at me.

Malcanis
Vanishing Point.
The Initiative.
#72 - 2014-04-19 18:52:52 UTC
Doc Fury wrote:
Assuming for a minute that PLEX are being purchased as an investment (as has been hinted at previously), it would be in CCP's best interest to keep prices low as investors in most commodities do not hoard or hold when prices are high.


"high" is a relative term. If PLEX are 700M now and I expect them to be 1000M in the near future, then I will absolutely hold them.

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

Grath Telkin, 11.10.2016

Lfod Shi
Lfod's Ratting and Salvage
#73 - 2014-04-19 19:43:05 UTC
...I play eve, so I can buy plex, so I can play eve, so I can buy more plex....

♪ They'll always be bloodclaws to me ♫

Sintiar Loffwagea
The Scope
Gallente Federation
#74 - 2014-04-19 19:53:06 UTC
36$ for 3 months is cheap.
Val'Dore
PlanetCorp InterStellar
#75 - 2014-04-19 20:10:47 UTC
Tippia wrote:
CCP start losing the instant an account closes down, because it means either means a direct reduction in income or a reduction in demand for income-generating PLEX.


And this is the myth we need to squash. Sure, losing subscription hurts CCP immediately, but not PLEXed accounts. The effect those accounts have are entirely implied, not actually witnessed. Since such things are not going to directly hurt PLEX revenue for CCP, we cannot quantify those events as significant enough to impact PLEX pricing by themselves.

The rate at which PLEX is sold is entirely disconnected from the rate at which PLEX is consume as gametime and thus cannot be used as a universal variable of the health of the balance sheet.

SOE had (has?) a similar faux way of accounting their revenues. They don't consider Sony Cash to be a product they are selling, they only account for second tier purchases using SC as revenue. Now that is certainly a good way to confuse the community, but the Securities and Exchange Commission will have words to say about it if it were done that way officially.

CCP's concern orientation, in regards to revenue generation, should be on PLEX sales and Subscriptions. That is why they are loading up on PLEX based services, rather than intentionally driving down the price of PLEX.

What you can do with PLEX is why people buy it with ISK. ISK is why people sell PLEX. The higher the value of them, the more that will be purchased from CCP. It doesn't matter how many are actually on the ingame market, it really doesn't so long as people keep buying them.

Star Jump Drive A new way to traverse the galaxy.

I invented Tiericide

Tippia
Sunshine and Lollipops
#76 - 2014-04-19 20:26:39 UTC  |  Edited by: Tippia
Val'Dore wrote:
And this is the myth we need to squash. Sure, losing subscription hurts CCP immediately, but not PLEXed accounts. The effect those accounts have are entirely implied, not actually witnessed. Since such things are not going to directly hurt PLEX revenue for CCP, we cannot quantify those events as significant enough to impact PLEX pricing by themselves.
Directly, no. Indirectly, yes. Because it means they have to replace an ensured subscription purchase, repeated monthly, with a much less certain purchase of a non-essential, non-reoccurring service. The only real difference between this loss and the loss of a subscription is that they can at least attempt that kind of replacement.

Quote:
What you can do with PLEX is why people buy it with ISK. ISK is why people sell PLEX. The higher the value of them, the more that will be purchased from CCP.
There really is nothing that supports this. It's a neat assumption, but if it really were true, we should see an impact on the market, and we don't.

Quote:
It doesn't matter how many are actually on the ingame market, it really doesn't so long as people keep buying them.
See, here's the contradiction: if it doesn't matter how many there are on the in-game market, then the price isn't a factor in the decision to buy or not to buy (since it's the number on the market that dictates the price), which in turn would mean that a higher value does not equate more being sold. Arguably, more might be sold if there is a higher service value — if you can use your PLEX for more stuff — but the ISK value would once again be a non-factor. This would be consistent with what the market is actually exhibiting, but only exactly because we don't connect higher (ISK) value with higher sales.

So sure, “the higher the value of them, the more that will be purchased from CCP” may indeed be true, but only if we talk about something different from ISK value, so its connection with the conspiracy theory that CCP would want to push prices higher is tenuous at best.
Val'Dore
PlanetCorp InterStellar
#77 - 2014-04-19 21:02:02 UTC
I don't believe CCP would risk playing with the PLEX market. They rely too much on buyer confidence to risk the backlash.

That said, I still don't see that CCP could consider PLEXed accounts going inactive as a loss of revenue. Sure they can make projections about it, but that doesn't actually change anything. Many people buy and sell PLEX in bulk, so those transactions aren't necessarily going to show a fluid market history.

Star Jump Drive A new way to traverse the galaxy.

I invented Tiericide

Tippia
Sunshine and Lollipops
#78 - 2014-04-19 21:21:50 UTC  |  Edited by: Tippia
Val'Dore wrote:
That said, I still don't see that CCP could consider PLEXed accounts going inactive as a loss of revenue. Sure they can make projections about it, but that doesn't actually change anything.
Oh sure. They'd be slapped all kinds of silly if they tried to put it on the books as such, but it's still something that will reduce their ensured income. It also hurts the big PR numbers — subscribers and concurrent user count — which doesn't look good for investors or in the media.

Quote:
Many people buy and sell PLEX in bulk, so those transactions aren't necessarily going to show a fluid market history.
Probably not per individual, no. However, if we look at the kind of daily and weekly compound numbers that now exist in the longer-term data collections, we see that on the whole, it is a surprisingly stable flow. Really, the tricky part as I see it is that we can't distinguish between new PLEX and stockpiling (either stock being released or collected, or even just exchanged between two different piles) — only that the number of trades is surprisingly constant.

So if people are buying more PLEX because of the high price, either someone is really betting the (real-life) farm that it'll keep increasing, which is pretty silly since they could just as well wait until the price is higher and purchase the PLEX then, or they should show up as trades. Or, they do show up as trades, but are being cancelled out by fewer people just buying PLEX for actual usage, which means CCP is losing customers for the services PLEX are supposed to provide. This option is arguably even more worrisome for CCP since that bubble will burst eventually.
ISD Ezwal
ISD Community Communications Liaisons
ISD Alliance
#79 - 2014-04-19 23:03:30 UTC
I have removed some rule breaking posts and those quoting them. As always I let some edge cases stay.
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SB Rico
Sumo Wrestlers
#80 - 2014-04-20 06:32:35 UTC
So the OP seems to feel CCP allow high plex prices to force people to pay subscription fees instead...

Well that would be insanity.

CCP makes more money from people plexing accounts than from those paying a monthly subscription.

Player A pays a monthly sub then buys a plex to make some isk.
Player B subs through plex but that is equivalent to paying for the game through player A's credit card at a higher rate than player A's subscription.

Remember every plex was bought from CCP at a higher rate than a monthly subscription.

The effect of lowering plex prices by CCP would decrease their income however as less people would buy plex to sell.

Lower it too far and we would see a reduction in plex purchases therefore a reduction in plex availability leading to a reduction in subscribers.... you can't buy what isn't there.

Now Player A still pays their monthly sub but does not invest in the plex as they don't think it is worth enough isk.
Now Player B, C, D and E who plex are fighting for the same plex.

There is within this a happy medium for CCP where the isk return encourages Player A to buy the plex, but is not so high that Player B can't afford to buy it in game. This is what is driving the price up, as long as people pay the market price then the demand is there and the price and availability increase.

Scammers are currently selling killrights on this toon for up to 5mil, if you have paid for this service demand your money back at once.

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