In most countries where EVE players reside, a 1 month (highest rate) subscription to EVE online cost something between 35 and 40 MINUTES of working a real life job. Put another way, 35 of 40 minutes of working per month pays for 728.5 hours of access to EVE Online. Even at minimum wage in my county, 2 hours will still pay for those 728.5 hours.
And yet somehow it’s too much, it’s so much that poor bush people in some dirt poor country (that somehow still has computers and internet access) are having to choose between EVE and FOOD. Oh the humanity, doesn’t CCP know that not everyone who plays their 100% optional spaceship game can afford a sum of money that averages out to be 5 U.S. dimes per day? WTF CCP?
Point blank, anyone who complains about sub or plex prices is a spoiled brat most likely living in a high income North America or European country. Said brat probably spends the monthly cost of EVE online (15 bucks) on Starbucks ‘coffee’ and cheeseburgers every single day without even thinking about it, yet somehow EVE is too expensive so someone better do something about PLEX!!
It should be noted that PLEX is Eve’s Gold Standard, as such it’s an investment as well as an item that can be exchanged for isk and services.
Those that have multiple PLEX are rubbing their hands together as their investment increases in value. Furthermore, they generally have enough liquid isk to snap up multiple or single (in their mind undervalued) PLEX as they appear, and either add to their investment or relist at a higher price. “Rich” people control the PLEX market; that which is above, corresponds to that which is below.
CCP only control the price of PLEX as a real world item, they’ve always been reticent about directly interfering in the market, certainly they have released PLEX on the market in the past, IIRC it was only the once, they thought long and hard before doing it and they had good reason for doing so.
Where exactly did I determine someone priorities for them. I’m not their dad.
I can and am commenting on the fact that if they are struggling to pay for a video game, they shouldn’t be playing video games in the 1st place. It’s insane.
People get insane when they start talking about money , and EVE is no different in this regard. The most batshit crazy thing anyone ever said to me was about the cost of EVE, basically suggesting that because he lived in some poor country, the price of EVE was too high because he had to have money to pay his maid.
Anyone suggesting that PLEX prices be capped or the like by CCP will not solve this problem. Not in the least. When you impose a price control below which a price cannot rise and is higher than the current market clearing price the result is called excess demand. It is exactly like it sounds, there is more demand than there is supply. People want the product, but there are not enough sellers to satisfy the demand. As a result there will be players wanting PLEX at the dictated price, but there simply will not be any available. So instead of not being able to log in due to rising PLEX prices people will not be logging in due to lack of PLEX. The problem is not at all solved.
As for why the price has been going up there are at least two factors I consider key. First is that CCP has been adding additional uses for PLEX. PLEX has no replaced Aurum, it is used for a variety of other things other than game time as well. This will increase the demand for PLEX at all price levels–that is a rightward shift in the demand curve. Given no change in the supply curve, this will increase the price. Each time a new type of use is added the demand curve would shift outwards. Note, that the supply effect is merely a movement along the supply curve, not a shift. A shift in the supply curve would likely be caused by a change in the OOG price. For example, a sale by CCP usually results in more people buying PLEX and more PLEX being put on the market for sale–i.e. shift in the supply curve, and all other factors held constant, a decrease in the price.
Another issue that could be driving up the price of PLEX is that PLEX may very well be a luxury good. That is the income elasticity of PLEX with respect to demand is likely greater than 1, or as a player’s income rises a larger proportion of his income will be allocated towards PLEX. When looking at the economic reports we see stable or even declining prices and an increasing money supply–i.e. player incomes are rising. If the income elasticity is greater than 1 then we’d expect to see the price of PLEX to rise as well.
To lower PLEX prices one would need to convince CCP to reverse course in regards to the uses of PLEX. Further, somehow lower player’s incomes. The first is unlikely to succeed and the second is likely to just as easily piss of players as much as the rising PLEX prices. I can see the posts now, “CCP HOW DO YOU EXPECT US TO BUY PLEX IF YOU KEEP NERFING OUR INCOME SOURCES!!!”
I have to say that is an impressive stream of incoherent consciousness.
For example, you referenced economies of scale, but if anything those scale economies work to reduce the price of PLEX. That is the more you buy from CCP, the more of a discount CCP will give you and thus the more PLEX that ends up on the market which in turn will decrease the price.
The speculation argument is nonsense. Speculators are not trying to drive up prices they are taking advantage of differences in information. Speculation is when you buy something because you know something the rest of the market participants don’t that will affect the price in a positive manner. Conversely you would sell if the information would have a negative impact.
What most people mean when they say “Speculators!!!” Is market manipulation which is not so easy. You noted that such market participants will want to cash out…but to do that they have to put PLEX up for sale. Putting up alot of PLEX all at once will crash the price. The faster you try to unwind that position the faster the price will fall. And there is nothing to stop someone from buying alot of PLEX and sending the price downwards, or CCP having a sale meaning you have to hold onto your PLEX and hope the price goes back up.
Trying to manipulate the PLEX market is, IMO, like trying to use a martingale betting strategy. It can work if you have an infinitely deep wallet, and I mean literally infinitely deep, not merely really, really deep. But literally as you take ISK out the balance does not go down.
Actually you are assuming that demand by ‘users’ is driving the price spiral. A price cap on Plex would stop investors driving ever escalating circles in prices, and then we would see truly if demand was outstripping supply.
Not to say I’m suggesting that CCP actually do that, but the results could be quite different from what you predict.
When the price goes up it indicates that for whatever reason the commodity is less scarce than it previously was. This does not mean it has to continue. In watching PLEX prices the last couple of weeks there was a strong upward trend…which was broken and we had a downward trend that is now leveling off. Why? I don’t know, nor do you. The point is that even if there are people are “speculating” based on simple price movements and not actual information that is not reflected in the market price, that by itself cannot be sustained indefinitely. Even a casual glance at the market graph in game should disabuse one of this belief immediately.
Actually, no, I am making no such assumption. I am merely noting that when the price is set, artificially, below the market clearing price it creates excess demand–i.e. a shortage. If demand is “growing”–i.e. the demand curve is shifting outwards as well due to say adding more uses for PLEX, then the excess demand will get worse. If supply is contracting–i.e. the supply curve shifts inward for some reason (say CCP raises the OOG price permanently), excess demand will get worse.
And I do not buy the “investors can cause a permanent upward price spiral”. The reason for this is the reverse of why “sellers cannot cause a permanent downward price spiral”. As the price goes up, this creates a premium for those players who buy PLEX and sell them for ISK. The higher the price, the higher the premium–i.e. the higher the incentive to buy PLEX for RL money and then sell it for ISK. Nobody has an infinitely deep wallet IRL or in game. Some might have very, very deep wallets, but not literally infinitely so.
Well okay, CCP does. But even CCP can’t get away with this. This would become the games more obvious and a massively huge ISK source. It would be CCP injecting stunningly massive amounts of ISK into the game. Which would ruin the game in short order.
Actually, I wonder if CCP just hinted at a price cap lower than the current PLEX price is, if this would cause this, speculation bubble to burst by triggering mass sales by paniced stockpilers. It would be a one time thing and a complete dick move, but so EVE like. Lol
I would absolutely not sell any of my PLEX. I’d wait to see what happened with contracts. I’m sure I’m not the only one to think of this.
Also, there is also the Sales Ads sub-forum as well. I’d be waiting for the shortage to hit, then I’d see what the is the highest price I could obtain. Or, I’d simply hoard them and use them up as my sub got close to expiring…either way, I’d be smug posting like crazy on here as everyone who was complaining about high PLEX prices showed up and whined like brats about how there are no PLEX on the market when they log in.
You are right, they are not trying to raise the PLEX price. But they try to predict (or speculate, if you so will) when the PLEX price will rise, so they can invest in PLEX when they are cheap and sell them again when they got more expensive. And even though they are not trying to manipulate the price in any way, that’s what they are doing. If it looks like the PLEX price is rising (which it has been for a long time now), then they will buy PLEX, which creates demand. But the supply doesn’t grow along with that, and that does affect the price, whether they are actually trying to drive up the PLEX price or not. And if at some point it looks like the PLEX price may drop significantly, they may try and cash in before that happens, thereby creating supply without creating demand, which will make the PLEX price drop. That is how a speculation bubble works.
However, like I said, I do not think the PLEX prices are being influenced by speculators in a major way like some people are claiming. I was merely saying that if it was only due to speculation, then the bubble would eventually pop.
Investing because they think the price will go up for a reason is absolutely not manipulation. If it were everyone investing in stock markets around the world would be guilty of manipulation. Hell, I’d be guilty of it and I don’t even know what stocks are being bought in my name via my 401k.
Buying PLEX prices and raising the price does not “create demand”. They are in effect the demand side…the demand side buys, the supply side sells. This is like saying, when I buy a car I create demand. No, I am satisfying my demand.
And I do not think there is a bubble in PLEX. PLEX prices have been rising over the long term with notable periods of price stability. Such periods of stability typically end when CCP ties PLEX to some new feature in game such as dual training, or replacing Aurum, etc. Add on that PLEX are likely a superior/luxury good (income elasticity greater than 1) and a stunted financial sector and PLEX become a good place to hedge against inflation and store value and even earn a decent return. All these things will contribute to an increasing price over time.
That’s just arguing semantics, though. If you are speculating, and deciding to buy something because of it, then there is demand where there was none if you had not been speculating. Of course, you can argue that you did not “create” or “raise” demand, but the fact of the matter is, because you are speculating, there is more demand. And more demand means a higher price. It doesn’t matter for the price whether that actually counts as “manipulation” or not.