No, the demand side buys. That they might become the supply side later on is not relevant…except at that future date when they do decide to sell. As the demand side buys they also satisfy the supply side. This happens until there is no demand and no supply side (technically we never get here as things are always changing so supply and demand are always changing).
And speculation can also mean…leaving the market–i.e. yesterdays speculator who bought is now today’s speculator who is selling. You can even have both at the same time. Speculators do not all have the same information set. Some might think it is time to buy, others time to sell.
It is all a great big complex gooey mess out of which prices emerge.
That’s all true. I initially said “If the prices are high because of speculation, then those speculators will want to cash in at some point”. And mind that “if” there. I said that, because some people like to claim that this is the case. And I said it in an attempt to explain why this is likely not the case, or if it really were the case, then there is no reason to moan about it and ask CCP to step in, as it would likely end at some point anyway.
Which from what I gather is what you are now trying to explain to me for some reason.
From where I’m standing, it looks like, although of course the PLEX price emerges from a big complex gooey mess, as you so strikingly put it, speculation is not the main contributor. And like you said, manipulation isn’t all that easy to do with an item of both high volume and high price, so that’s not likely it either.
I think PLEX prices can be as high as they are mainly because the people using PLEX to buy pixelshirts, extractors or omega time are willing to pay that price. And that’s all there is to it. As long as people are still buying PLEX, the price is fine. And once they stop buying PLEX, the price will drop automatically. It regulates itself, there is no need for CCP to do anything.
Sure, it regulates itself, but if people stop buying PLEX because they are quitting the game, that isn’t really a desirable outcome. Whether they choose not to pay for a subscription because they can’t afford it, value the game less than the $15 a month, or have become dependent on (AKA entitled to) PLEX to play the game a certain alt-heavy way and won’t accept a downgrade in their lifestyle doesn’t really matter. They leave and that is bad for everyone in a sandbox game and CCP might want to pay attention to that.
I don’t buy this latest rise is a in-game issue of speculators or market manipulation. It is more likely a supply-side shortage of PLEX given there isn’t much going on in the game as both reflected in the PCU and destruction numbers (as well as some structural effect of unifying the currencies). We don’t have the data to confirm this hypothesis nor is CCP likely to tell us, but a decrease in real-world PLEX sales is something that directly hits their bottom line and is something they should be concerned about, yet is also something not easy to fix. It’s also secondary to the real problem that activity in their game keeps dropping, so if they can drive interest, the PLEX shortage will solve itself as players re-activate their accounts and start buying more PLEX from them to sell on the in-game market.
I am very eager to see July’s MER to see if that bears out.
But there really is nothing CCP can do short-term other than to have yet another PLEX sale which seem to have diminishing effects on slowing the PLEX price rise. I would argue this is because there are less-and-less customers who habitually use PLEX to trade for in-game resources playing, and even the ones remaining that do use PLEX to cover their PvP losses need to buy less from CCP because they are worth significantly more than just a few months ago.
As for those frozen out of the available PLEX on the market who are unwilling to ‘up their game’ and grind more or better have to make a choice whether to start paying directly or leave, but even if only some of them leave, the universe of New Eden will be poorer for it and there will be less reasons for players to come back. But yes, PLEX prices will stabilize faster the more of these PLEX consumers quit the game (or to be fair switch to a subscription).
Very true. However, at some point we simply have to accept that this is an online game, and online games cost money. And if a thing costs money, there will always be people who cannot afford it. The option to pay your omega subscription with ISK is nice, but it is just that - an option. It’s not mandatory in any way.
And in the end, even if a player does not pay his 15 bucks and uses PLEX bought off the market instead, somebody else still pays for their game time. And I do not think artificially capping the price would exactly help if there already is a supply issue. 1.5 billion ISK really is not a lot these days, and for a player who opts to spend 20 bucks on PLEX to sell them on the market, it has to be worth it, or they won’t do it.
So let’s assume for shits and giggles CCP were to cap the PLEX price, or otherwise affix it to a certian ISK value. Players who want to PLEX their accounts would then probably have an easier time to alot the ISK to buy them, but possibly not find any PLEX they could buy on the market, and they would potentially stop playing all the same.
Yes. That doesn’t matter for the point, though, because people are objectively wrong when they keep saying that the game becomes cheaper with a year-long sub, when what they talk about is affordability, which doesn’t improve at all.
I am trying to point out the logical fallacy, or trap. Marketing really messes with people’s brains.
I was and am still correct about prices doubling over recent months and yes it is exponential
300m-900m in a period of 7 years would be considered stable at a rate of about 90m in a year.
In the last few months it’s gone from 1b and decreasing, to 1.2b around when the nuplex devblog came out that’s approximately two years of inflation in the span of 2-3 months and following the actual change old Plex to new Plex we’ve seen a rise from 1.2 to 1.7b+ which is 500m+ in the same period of time.
That is an exponential increase. Plex would cost 3-4b or more in 3 months if it followed the same exponential growth.
Please don’t use the word exponential if you don’t know what it means.
Off topic but related to the discussion is a good story to go read about: the invention of chess.
Story goes the guy who invented it asked the king for one grain of wheat on the first square of the chess board as payment, he then asked for two on the second and 4 on the third, so on so on doubling on each square of the board.
The king accepted the doubling of grain of rice or wheat or whatever on each square because it seemed so small an amount but he didn’t know how exponential growth worked and the fact a chess board has 64 squares.
1,2,4,8,16,32,64,128,256,512,
1024,2048,4096,8192,16384,32768,65… Anywho by the last square it’s an obscene number and when the king found out this guy had played him he had him executed. Or so the story goes and it introduces the thought of seemingly small insignificant amounts exploding into some unfathomable at first.
It something interesting to read and is a good example of how exponential growth works with a simple analogy.
300m to 900m over the course of several years is alot sure, but .9-1b to approaching 2b in a fraction of that original time frame is a clear example of exponential growth and to say otherwise is either ignorance or disingenuous.
Of course. There is no real in-game solution to the price. It is largely a function of how many players are selling PLEX on the market and how many want to buy. There are just not enough people who want to exchange real-world money for imaginary ISK as there once was.
There are some changes that could be made as to how the in-game wealth faucets are distributed, but even then, if there are only X amount of PLEX on offer, only the top X wealthiest in-game players are going to get a PLEX (or the equivalent in skill injectors since they are effectively interchangeable for this discussion) and the rest either quit or pay real money.
The problem is that as X decreases as less and less PLEX are available, more and more players have to make that choice and some of them are going to be leaving New Eden, likely forever. That’s reality. There is no point in whining over that, but that doesn’t mean CCP should just shrug that off as some players suggest as the whim of the “free market” or whatever and not a concern. It should very much be taken seriously and a sign there is growing discontent over the state of the game.
Now of course I could be wrong, and the increased ISK:PLEX exchange rate could have spiked PLEX sales and everything is A-OK on CCP’s end. We will still lose players, but at least the bottom line would be healthy and the in-game market will adjust with the PLEX going to the biggest income earners who just may be different than the ones before who are now whining because they have been left behind by a changing economy. Judging from the number of PLEX listed for sale on the market that ain’t the case, but I fully admit we just don’t have the data to say whether this is just a normal market move of PLEX adjusting to the new realities of the in-game economy shifting around who is a ‘have’ and who is a ‘have-not’, or a more dire reflection of a general dying of interest in the game.
CCP determines drop rates and mineral requirements, but that does not mean CCP determines supply. We still need players to go out and mine and shoot rats. So CCP determines part of what is going on in the game. It is like how nature determines how much oil there is in the ground. Players are a pivotal role in the whole process. No players, no supply. No players, no demand.
If you are going to argue that CCP determines the total available veldspar in the game because they determine the number of asteroids and their content therefore they control the economy then we have nothing more to talk about really. You have an obtuse and blinkered view and ignore that there is actually a process where the players play the critical role.
Your view amounts to nothing more than arguing CCP has seeded resources, why they control the entire economy and interfere. The first part is true, the second part is not. There is no contradiction here. The players drive what happens in the market. Players determine demand, players determine supply and there are thousands, perhaps millions of player interactions that are at work. CCP has an important role in terms of seeding resources and setting the rules of the game, but once that is done they step aside.
A price ceiling–i.e. a price that PLEX cannot exceed, will reduce the number of people selling PLEX for ISK. At say 2 million you might have say 50 people willing to buy PLEX for RL money and sell them. At 3 million you may have 75. This is why supply is upward sloping. The opportunity cost of using RL money for PLEX becomes relatively less at 3 million than at 2 million so you get more sellers. At the same time you’ll have more people demanding PLEX than we currently do. The reasoning is roughly the same, but inverted. These two effects work to create what is known as “excess demand”. That is where demand exceeds the supply. Normally, the way things would work is the price would increase, and thereby decrease the demand and increase supply so that these two move towards equality. The limit result is equilibrium where the number of PLEX being sold exactly equals the number of PLEX being bought. But a price ceiling prevents this process from taking place. It leaves us with demand being greater than supply…hence the term excess demand. If one were to google it and go look at the Wikipedia page you’ll see that it is pretty simple:
D[p] - S[p].
That is the products demand function less the supply function. This expression is greater than zero when the price is such that p < p* where p* is the equilibrium price. This can be seen intuitively by drawing a demand and supply graph. Look at a price below the equilibrium price. S[p] < D[p] => D[p] - S[p] > 0 or we have a shortage and somebody has to go without.
So, what we would see is that whenever a PLEX is put on the market it would be snapped up instantly. So you’d have to sit at your computer and compete against hundreds maybe thousands of others whenever PLEX hit the market. Some might not get enough to PLEX their account that month and ohhhh the forum rage then. Instead of whine threads about PLEX prices we’d have PLEX prices about not being able to find them on the market quickly and easily.
Basically we’d move the PLEX price from being expressed in terms of ISK, to being expressed in terms of time wasted trying to snip PLEX. And for some people they will fail and not obtain enough PLEX to PLEX their account.*
And yes, your conclusion is exactly right. Right now some stop playing the game due to PLEX costs and RL money constraints. It sucks, but not sure how we deal with that. Expecting CCP to correct that kind of economic issue via their product is rather foolish and short sighted in that it transfers that cost to CCP and why should CCP bear the burden of another countries foolish economic policies? Trying to solve economic injustice in this way would simply screw up the market process and make it nearly impossible to work and provide all the goods and services and value that the market does provide. And let me be clear, that value is enormous. Just back in 1950 the number of people living in extreme poverty was much, much higher than today. I recall hearing on the news that the number of people living in extreme poverty (less than $2/day) has, for the first time, dropped below 1 billion world wide. That improvement, however meager it might seem is due to the market process. Only the market process can lead to such massive coordination among billions of people across trillions of transactions. Whenever planning has been used in place of the market the results have been appalling. Look at Venezuela today.
No, your initial claim was false. 3.2 million is not 2x2 million. 3.2 does not equal 4.
As for the exponential nature of price increase, no you are wrong there, or if it is exponential the exponent is so small we cannot see it right now in an empirical sense. An exponential time series, like say GDP or the stock market, does not show the extended periods of “flatness” we see in the historical data.
No. I already showed that there is an alternative model that is linear and fits the data. Exponential does not mean large increases. Exponential means that the rate of growth is proportional to the value of the function. Since the change you noted can also be expressed as a function of a constant as well, just noting a large change is insufficient.
You should take this advice. You clearly do not understand this concept.
[quote=“Teckos_Pech, post:308, topic:11792”]
CCP determines drop rates and mineral requirements, but that does not mean CCP determines supply
[/quote] so they didnt nerf rorqs
[quote=“Teckos_Pech, post:308, topic:11792”]
we have nothing more to talk about really
[/quote] yes i know
we already established that when you started going damage control
[quote=“Teckos_Pech, post:308, topic:11792”]
The first part is true, the second part is not[/quote] then why do you confirm it in your own posts
where you give direct examples of ccp interfering with the market
and then interfere when things start going in an undesirable direction
We mined more the month after the rorq nerf than the one before so they definitely don’t determine the supply in a hard way. They set some threshold but player activity is still a massive driver in all supply number of the economy.
sure but ccp can do a number of things to affect the supply and will do if they need to
they can nerf or buff mining ships
they can do that with mining modules
they can modify yields
they can modify asteroid spawns
they can even modify the transportation of resources
teckos thinks all these numbers are a natural part of the eve environment and havent been calculated or modified in any way
and that ccp will not change any of these variables if they feel the market is negatively affected
which is what they did with rorqs
whether you mined more the following month isnt the point
the point is they modified the numbers in an attempt to achieve a desired outcome
Micro transactions and rising plex prices is how all those “free” alpha pilots get to play and CCP can still rake in the cash. You pay so they can play!
Game for us, business scheme for them. Plex prices will not go down just because of market forces despite all the fanboy fluffing going on.
When CCP introduces new items that replace old items, they plan on removing, at huge price increases that is not “Free Market Forces” in action, it is manipulation to squeeze more cash from the player base.
Look at the cost of Citadels compared to POS, not supply and demand, CCP set the price from day one very high.
its not stable at 3.2 tho. it was 3.7 and rishing and when this dump is done its gonna go back up to 4m and past 4 as i said it would months ago. 3.2 is new from just today and yesterday.