Market Discussions

Hey folks,

Was having a discussion in the good lounge and the use of BPOs as collaterals in loans was brought up.

Pre-Crius
The standard approach to BPO valuation was to use 90% of NPC price. This approach would allow loanee to get liquid isk but hang onto their blueprint through third party or the loaner. Should the loanee default or run away, the loaner can turn around and sell the blueprint. However, the time it takes to sell the blueprint varies widely depending on what it is and how much research it has, thus the extra 10% is used to compensate the loanee for the loss of his time.

Post-Crius
The game's changed. ME level now plays a big part in the valuation of blueprints. Let's take Rorqual BPO for instance, taking 0 to 10 ME would cost more than what the NPC price of the blueprint is. Essentially, a perfect Rorqual blueprint is worth 6 billion in both NPC price and research cost.

How does this change the loan game?

No loanee is going to accept 90% of blueprint NPC price in isk. 2.7b for a blueprint that's worth 6b
No loaner is going to offer 200% of blueprint NPC price in isk.

Thoughts?

Some bpos are still oversaturated in the game such that the potential supply if all bpos were in use would far exceed the demand for the product. This used to be somewhat offset by the use of bpcs which, due to copy time being far longer than build time, would artificially lower the supply and increase the scarcity and therefore value of the bpo. Now copy time has been hugely reduced the real terms output of the bpos is higher than ever and if that exceeds the supply then the value of the copy, and therefore of the bpo, will drop.

What all this means is that in oversaturated bpo scenarios, of which a great many exist, bpos are going to be more worthless than ever post crius. The issue of buying and researching a new bpo from scratch is irrelevant in those scenarios because the market will be flooded with perfect bpcs until demand finally catches up with supply or until the bpcs get so worthless people stop even copying their bpos.

You are wrong where you think a ME 10 is really worth it. Why? If you buy such a BPO now you WILL NOT research it to ME10.

ME 6:
Job Material Cost 2,205,156,946.11

ME 7:
Job Material Cost 2,168,027,709.10

ME 8:
still the same

ME 9:
still the same

ME 10:
Job Material Cost 2,095,629,500.58

So you save 73m for what? A year or so of research and ~3b? So you will have to build 41 Rorquals to regain the ISK but that does not factor that you could have been building 1 year earlier for a lot of profit already.

Basically there is no use to research BPOs to such a level unless you plan to go on a long absence from this game.

Tbh CCP screwed this part of industry up because everybody that has a pre crius bpo now has an advantage over starting industrialists. I really hope they change this at some point. I mean all those Capital Part BPOs with 10/20...

If you want to talk about whether or not taking a BPO to 10 ME is worth it or not, take it to another thread. This discussion is about how researched blueprints should be valued as collaterals in loans.

Which is what I responded to.

Value will still be NPC because the required amount of research can be achieved with minimal effort and ISK (something like 7/12 is achieved insanely fast).

The collateral value will always be market value minus some safety percent. And with these changes it is immensely quick to get a BPO to a level where it is usable. I just did the math to show that only few people would be likely to pay such a premium for a 10/20 BPO (not saying there are none).

But overall value will be closer to NPC than pre-Crius.

Collateral's value is not based on what it would cost you to make or get it. It's based on what you could sell it for easily/fast. So NPC price - 5% should be good for most cases. Value is always going to be in 3rd party's favor, and needs to be.

This means that trusted third parties are going to play a role, as the involved people are known for not exploiting those opportunities to screw up one of the sides.

I have held 100B for myself and probably more for third parties, Grendell / Chribba even more than that. Do you think anyone are going to give a stink about handing us their 2B BPO or even 10B worth of BPOs?

I personally wouldn't want to handover my BPO for less than the replacement cost, but I don't know if the resale market is willing to accept those prices, yet.

All my battleship, carrier, and dreadnought BPO are ME 10%. My Rorqual is 9%, and I will spend the billions to get it to 10%, simply because I am a collector. I don't expect the Rorqual to valued as much as the Archon or Moros though.

I've not seen any 10% capitals on contract yet, but that may mean they just get purchased quickly.

Highly depends on the BPO. As stated above, some BPOs are over saturated, some are valuable, and some are rare very much worth it.

And this isn't just purely 'Expensive BPOS are always worth more'. Look at super cap bpos and the tragic fall they crumbled to. I bet a lot of people would be content getting out of them at npc + 5-10%