You keep claiming something, I ask what allows you to claim that thing.
Very simple yet you fail it. If it was simple you could post it here and not complain about its existence without any valid argument. “I have arguments but I won’t show them”. Then you are a fool.
I guess the issue is not in the game, but in the gamer.
Claiming that nobody can compete with an illusion you just created is pretty … tasty ?
Here is a nice guide you can use to figure it out for yourself, since that is usually the best way to learn something.
Take a look at the costs of Invention,
Then take a look at building the same item using a T2 BPO.
You will find that material costs using a researched T2 BPO will always be lower than a BPC produced by Invention, and that doesn’t even include the Invention costs to create the 10-run BPC.
Bottom line, there is a very good reason T2 BPOs cost so much.
The material cost advantage means they can still make a profit while selling it at a cost lower than Invention can break even at.
That’s normally true with products that can be differentiated.
Items in Eve or more like commodities, thus cannot be differentiated, so they compete solely on price.
The production advantage of using a T2 BPO makes it impossible to compete on price since they can always produce below the costs of using Invention created T2 BPCs.
In Invention, the only way you can sell something at a lower cost than what a T2 BPO owner can produce the item at is by selling it at a loss, thus you are not competing.
The reason you can still sell things that BPO owners are producing is because the demand is greater than what they are producing, but in that case you are not competing with them, you are just taking the orders they couldn’t fill.
Basically, Invention is only competing for the scraps of orders that T2 BPO owners are not filling at that moment.
You are only truly competing with other Invention players. Not T2 BPO owners.
Finally you get it. What took you so long ?
You actually ARE competing with them. Just because the cost is let’s say 20% cheaper does not mean they will sell their items 20% cheaper.
Let’s say every day they can produce ONE item 20% cheaper, while the market daily volume is 1000. Why would they sell that one item 80% of the average price ?
Their MARGIN is higher that yours, does not mean you can’t compete.
And if they want to make a good margin, there are much more worthy things to invest into.
To be clear : the volume limitation of T2 BPO make them worth for low-volume operations. On high-volume you will end up making more money at the end of the day purchasing bpos, copying them, then inventing them, then crafting them. Unless you have 10s of T2 bpos that is.
yeah indeed. But last time I checked ( a few years ago …) it was in decade worth. And citadels only reduce the time to 40% so 10years become 4 years, assuming you don’t crash your own market.
Not quite. You are still competing for the inputs. And if the invention guys were not there then the T2 BPO guys could raise their prices. I get what you are saying, but there is still pretty much one price that people are converging on, both T2 BPO and invention.
There are items that do not have T2 BPOs. And it is not clear that all T2 BPOs are currently being used. Players who had those BPOs and then stopped playing effectively takes those BPOs out of the game. And some T2 BPOs are just simply rubbish (i.e. the market for those items are garbage as well).
Not if the price is above the cost of invention.
That is, suppose the price is 100 ISK, and invention costs are 25 ISK and the T2 BPO costs are 20 ISK. Yes, the T2 BPO player could sell for 99 ISK, but then so can I. Yes his profit rate is higher, but so what. And this competition would go all the way down to 25 ISK where I am indifferent to staying in the market. But…there is that demand thing again and T2 BPOs can only crap out so much each month. All the T2 BPO holder would get is 79 ISK a bit faster than 80 ISK.
Basically the T2 BPO holders get some economic profits and that is about it.
You are right, it could just be seen as a real good competitive advantage though cost leadership.
I think its an unfair competitive advantage that shouldn’t exist in the game.
It gives them too much market power, in the markets the T2 BPOs are being used in.
I still believe that Invention can’t truly compete due to that competitive advantage.
Back in the day when I was doing Invention there were a few markets I couldn’t get into due to this.
The selling price was always less than I could make the item for and when I did the math, it showed that someone with a T2 BPO only researched with some like 10 ME was still making a profit.
I feel that essentially gave the T2 BPO owner a Monopoly-like power for that item. They could make themselves the sole producers for that at will just by setting the price at that level.
Invention always sets the upper price limit on what T2 BPOs can charge in those markets where they are the only providers. If they go over that price then inventors can enter the market and drive the price back down. This is Baumol’s contestable markets but with some barriers to entry.
Sure it can as soon as the price goes above the invention shut down point.
Yeah, and those markets the price is limited by the potential of entry.
Yup, but limited by the potential entry of inventors. It puts a cap on how much price setting power the T2 BPO owner has.
Only so long as demand does not change that pushes the price above the threshold for invention to provide competition.
In economics each good has a cost function. That cost function is dependent on the price of the inputs and the number of inputs. So for a given set of prices there is a cost, call it C. For the inventor his costs are different than those of a player with a T2 BPO. Typically the T2 BPO will produce at a lower cost. So if the invention cost given some set of prices is C1 and the T2 BPO cost is C2 for a given set of prices then C1 > C2. Now if the T2 inventor can meet all of the market demand he’ll set the price at either his marginal revenue or just below C1. Either way he is earning as much profits as he possible. And this is generally true for all input prices, so when demand can be satisfied entirely by the T2 BPO holder(s) then there will be no invention and the T2 BPO holders will have some level of price setting power. This is especially true if there is just one producer.