Market Discussions

Bad Bobby teaches a lot of valuable knowledge for those who can read it.

Only so many times you can beat your head against the wall about how PLEX does not create ISK before you need to take a break for medical attention.

You only look to the other side

Prices are driven mostly by the peoples who sell it and they dont want to sell it cheap.
Thats all...everything other is theorycrap,i like to read it and all..but..."you" need that plex...they dont "need" to sell it if its cheap
Peoples would not sell plexes fthey have "capped" price,they woul buy ISK in an ilegal way
Peoples who want to buy ISK have more opportunities to do so,but "you" have only one way to pay for the game,if not with cash.
CCP awnt to keep plexes attractive for peoples who actually sell them.

Man, I've written on this so many times and really, its all about the religion of free-markets, and conspiracy theorieos on price manipulation but

.... very very little talking about the tail tha wags the dog.... how many real life people want to pay money to play the game and how many want and are willing to pay even more to get more game stuff without doing the stuff in game to get it.

That is a RL consumer decision on a 100% discretionary item.... like buying a shirt at a rock concert or something when you already have a drawer full of warm clothing.


......

ISK is the commodity, not plexes.

For those on the buy side for ISK, a plex is a proxy for $ .

- People buying ISK are making an Isk per dollar valuation... the game time value of the plex is only important as security fall back utility.

Mental barrier: because the EVE market has people buying Plex with ISK, it is hard to look at it upside down, but if you do things fall into place . Supply does meet demand. Isk supplied is much more based on a cost benefit analysis - for a rmt it might be $ per hour - for players considering paying $ its a matter of if it is still fun to spend so many hours making isk needed... first few hundred million just collects on its own whle doing what they enjoy in the game perhaps - for what i think its the majority of is>gametime users, while fun is an aspect, espeically related in tedium of babysitting many accounts, the cost benefit has a lot to do with how much profit above and beyond the iSK cost an extra account is worth. A forth type is most direct supply and demand being an end user of game utility, not a wheeler dealer necessarily.... how much game time doing PVE is worth the larger policital PVP stregnth from maintaing a titan purchased and kept active solely with in game resources.

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Free markets lead to the most efficient allocation of assets (for the sake of argument, quibbles set asside)

Free markets lead to the most efficient EVE economy (i'll go with it)

BUT

Efficient EVE economy != most attractive game enviorment and/or the maximum revenues short term or long term for CCP

It might , but not necessarily.... certainly a Vibrant economy is a positive pull, but even for those interested a truley efficienct marketplace might be dominated by players that could stock every system in the universe with profits just above the cost of production ..... that really wouldn't be much fun at all for most people who like market games.

Best economy is one that scales and has pockets so that people with different sorts of game play preferences can interact with each other without one type of play habit compromsing the recreational value of another too much. "Gold Ammo" philosphies differ, but even people who are ok with "gold ammo" don't want to be one shot at long range by someone with even more rediculoulsy priced "platinum ammo".

-- distribution of income and the degree real money effects game play are important balancing considerations in making an enjoyable game. Game economies have inputs and sinks monitored, create alternative ways for players to equip them selves for intended game ... its a partially planned economy even if huge segments are free but relinquishing all control really is unlikely to create the most fun for the maximum number of people, especially the lifeblood of new people (and giving too much isk to new people can take away all sorts of parts of a game play cycle where they can be attached....as bad for some players as being shut out entirely from being autonomous)

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Onto Corn : Real LIfe example how free markets don't always move to create the most revenue, or profits, for a given firm or industry, especially in the shorter run.

Lower prices for corn will tend to increase the # of bushels of corn sold but there is no law of economics that suggests that needs to come at a 1:1 ratio in terms of price to volume. It is entirely possible for a bumper crop of corn where 150% of normal is produced but prices drop in half resulting in 75% of total revenue to the industry. As there is a cost involved in creating the corn that is basically the same for 100% years as it is for 150%years , If there were a 25% profit margin in a normal 100% year they could see themselves almost in the red the year they had a huge harvest along with everyone elses huge harvest.... thats right losing more with a big crop. Prices surging up 50% (not unheard of in a commodity business with relatively inelastic demand) the years where there is only 80% of normal production means industry revenues up 20% (80 * 1.5 = 120) but profits almost doubling .

The real boons are when one region gets a bumper 150% crop when most regions had terrible years. When a given farmer gets a 150% crop in a year with 150% prices, he's getting 225% of normal revenues and %600 of normal profits. Believe it or not, this sort of variation isn't some whacked out idea but pretty common to many types of family farmers over the last century or so. (I won't get into the mismanagement or rational of subsidies.... or grower associations or cartels etc.)

Commodity pricing can be strange, yet each type of industry has its wrinkles ..... Barriers to entry for competitors, abilty to judge consumer trends rather than a R&D correlated quality...many others.

Corn != EVE
my point above is that "the market is always right" has to do with capital allocation in a greater economy , not profits or net sales of a company

It would take more to flesh out some of the last points but thats enough for now. Drawing some yield curves and shifts and intersections would be a good way for people to get their head about what variables they need to think about as constants.

If the price of the PLEX were fixed, several things would happen:

As more players learn how to make isk, they would more and more switch to using PLEX to fund their account. An ever rising price would not be a deterrent to switching to account funding via PLEX.
As more players learn how to make isk, fewer would use real money to purchase PLEX and sell in game. A ever rising PLEX price would not be there to encourage the purchase of PLEX.

The result would be a PLEX shortage, any and all on the market would get bought up, and the rate at which new ones get put on the market would be less than demand. Only those with a good internet connection, sitting at Jita hammering the "buy" button would get a PLEX.
A "black market" for PLEX would spring up as more and more players became desperate for a PLEX to fund their account. Players would be selling them via trade windows or third party services, to get around the price fix.

Things CCP can do to lower the PLEX:

Sales.
Step up anti-RMT and anti-bot efforts.
Sell any PLEX in the inventory of permanently banned accounts, giving the ISK to that account just in case it gets un-banned.
Get rid of the Aurum. Sell vanity items for ISK.

Edit: Things you can do:

Drive slower so to save gas money. Use that money to pay for you account. The equivalent "ISK per hour" (in this case hours spent driving) beats almost enything in game.
When buying stuff (in RL) spend more time comparison shopping. Again, the money you save per hour, when translated to ISK, is better than most any in game activity.

I'm always impressed by how so many people know so little about so many topics.

Like several have stated before, PLEX doesn't generate isk, it's not a faucet.

RMT is not responsible for the hike in PLEX prices. In fact inflated PLEX prices hurts RMTers' bottom-line. By RMTers I mean the people selling the isk, not the people buying it. To those this is very good news.

Unlike CCP we, the broad gaming community have no access to the full statistical data that would allow to have any sound opinion on how to 'fix' PLEX prices, assuming it needs to be fixed to begin with. Tho if I had to guess I'd say this looks like a long lasting speculative bubble more than anything else. And it's fueled by newbie stupidity that's preventing the price to crash.

Wow would you like to join my pub quiz team?

That's why I don't think they'll ever go to 1b each, 30$ for 2b would be too appetizing for some people.

i dont see how you could limit the price short of ccp selling 500m isk to people directly and selling plex at 500m with unlimited supply(npc sell order). would be easier for them to just adjust a few isk faucets.

They can't do this because it's illegal. The U.S. government will not allow the trading of it's currency for internet currencies.