Hehehe. Bear with me, I am not economist. 
So Ivan at the Soviet Central Planning Bureau calls up the supervisor at the nail factory and says, âWe need one ton of nails.â
One month later, Ivan is out front of the Bureau looking at a one ton nail.
Prices are importantâŚundistorted prices even more so.
Yeah. Your graph disproves my previous impression the jumps where not only more dramatic, but also in a shorter period of time.
But its also a 1bil increase (from 2 to 3bil), so +50%, in only 12 months.
If anything, the price of PLEX is rising faster, and harder, than ever before.
(Until you probably disprove that too with another graph :D)
To my knowledge thats unheard of and I think it can be agreed that this kind of massive increase certainly steamrolls right through any number of psychological thresholds regarding how people play this game in regards to PLEX.
Yes, and what was going on then? In fact, we could probably point to the increase being a shorter periodâŚstarting in mid March 2017 PLEX started increasing at a faster rate. Before that there is a very slight trend, but just barely. The new trend was pretty steady until about mid July 2017 when it took off and prices rose dramatically. But then the price crashed back down and stabilized around 3 million with a bit of an up trend at the end of the time series.
So what happened in March 2017? We got PLEX vs the old 30 Day Pilot License Extension. This likely resulted in increased demand because now players sitting on more modest incomes could get into the PLEX market. If you are making say 100 million a month, buying 2-5 PLEX is not not wallet breaking. 50 Players doing this and now it is 100 to 250 PLEX being bought up. This relationship scales pretty much linearly too. 500 players with modest income might mean 1,000-2,500 PLEX are being bought. Why? Saving up for a PLEX for their sub. A place to store their ISK and protect against inflation?
Why did the run up in the PLEX price stop? CCP had a sale. That and I bet some people started dumping their PLEX stores. Suppose you bought at 2.5 millionâŚnow the price is at 3.25 million and going higherâŚmaybe a good time to get out and take a 30% profit?
After that for about 7-8 weeks PLEX stabilized around 3 million, then in the past few weeks there has been a modest trend upwards.
Now, is this proof? No. But given I can point to actual non-controversial real world events vs. a hidden conspiracy/cabal, Ockhamâs Razor says we should strongly consider the former vs. the latter.
Notice something about the in-game price graph for the entire history that we can view? That PLEX were up around 2.5 million, and the pirce declined by about 25% in one month.
Why do you see the decline as significant when measured against:
A) Its inevitable increase
B) The sudden spike
Because it is always and every where: PLEX are rising and too fast. But in looking at the time series and considering how PLEX have changed over the years, maybe the right conclusion is: there is no problem.
oh how I remember the good ole days where it was just
US price vs UK price
then these Icelanders got involved and fawked it all up.
this is price discrimination shame on you ccp⌠shame on you
you need to fix the price
The value of plex has risen due to the many uses it has. The fact it has many uses has affected the demand for it. What we find is anything in high demand can command high value.
When plex first came out itâs only use was to stop isk buyers and sellers trading real life money for ISK they farmed and to provide a way for people to pay for Eve without a debit/credit card.
Now plex is used to buy Skins and apparel, Dual training, tickets for Real life Eve events, skill extractors.
If plexâs only use was to access the game then Iâm pretty sure we would see lower in game prices. I think there should be 2 types of plexâŚOne for accessing the game only, and another type for other stuff like skins and dual training. Iâm trying hard to see any flaws in my suggestion and I canât. What do you guys think?
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It comes down to price elasticity of demand an although ive not run the figures i hope a lower plex price would have the same effect on ccps bottom line. Ive seen too many people leave the game due to the price of plex.
I figure CCPs strategy will be to gradually expand Alphas so as to keep activity levels up in-game, to retain a player pool of potential sub/plex purchasers, and in hopes of attracting more F2P/new players.
PLEX will just continue to get more and more expensive, which in turn will prompt some players to purchase PLEX (as it gets harder and harder to earn sufficient isk to PLEX, or otherwise fund content, in a wide variety of activities).
The injection market will also continue to drive PLEX up and I think there is still so much isk out there in some pockets that they just dont care how high costs go.
SP farms will just get bigger and bigger, and since their value is linked to PLEX, it doesnt really matter how expensive PLEX gets, they will still come out ahead as long as there are people out there buying SP.
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Its important to cater for a specific customer within business, people who donât have a debit/credit card are a specific customer. If we analyse the nature of someone not having a payment card it means they are too young, they canât afford it, or they live in a poorer country where its very hard to get a debit card.
With this in mind CCP must be careful how they deal with these customers, I think by offering a game time only Plex as well as a expansion Plex will secure more customers.
Keep it simple, game time is an important product within eve and it should be simple and realisticly priced to reflect.
If CCP get the players to fill out a mandatory survey with any in game Plex purchase Iâm sure they will find the people who use Plex for game time only are in no way interested in anything else Plex offers except for game time.
Engage your customers CCP, bring the game back to the old skool where one can pay a sub for the next man. This is a game after all and it must promote coolness, and understanding for all walks of life. Good luck with sorting this CCP.
I think youâll fine the correlation there is not very good.
SP farms suffer from diseconomies of scale past a certain point. So no.
Getting a debit card is actually quite easy. Open a checking account. Thatâs it.
Now if you live in a country where securing a bank account is problematicâŚchances are you are part of a minute fraction of the player base. Similarly for those who are struggling to pay a monthly sub. If $14.95 is a large part of your monthly income then perhaps one should sit back and examine oneâs priorities?
CCP tried that to some extent with Aurum and decided to move in the opposite direction. My guess is they are thinking that this will be better for their bottom line.
In any event, below is a graph as what I believe is happening more than anything else.
So that early price/quantity, (P1,Q1), combination represent our initial starting point. Then there is a shift in demand. This shift could be CCP tying PLEX to something else such as dual training or it could be something that changed in game resulting in increased ISK income. So the demand curve shifts from Demand1 to Demand2, and with it we start moving to the price/quantity combination (P2,Q2). Similarly for Demand3 and (P3,Q3). Now if there are gaps between these shifts in demand weâd also see periods of relative price stability.
How so? Obviously I find it the opposite.
How is the correlarion ânot very goodâ?
What do you mean by âdiseconomies of scaleâ. SP is always valuable.
Okay here are the graphs,
They are both following the over all Trend, which is to be expected given that SP are dependent on time, as are PLEX. And here are two regression results, the first is PLEX as a function of LSI prices.
Now this says, LSI prices cause PLEX prices to go up. But also consider this regression,
Here I have flipped the exlplantory and dependent variables. That is this is a regression of LSI prices on PLEX prices. Notice that the statistics in bold are exactly the same.
So which is it? Are PLEX prices driving LSI prices or are LSI driving PLEX prices?
What do PLEX represent the ISK value of game time, yes? And where to SP come from? Game time. So one could make a case that PLEX prices are behind the rise in LSI prices.
Now consider these two following regression, the first has LSI as the dependent variable and PLEX price and a one day lag of the PLEX price as the explanatory variables,
What do we see? The current period price is statistically insignificantâi.e. we canât tell it apart from zero. We can also see this in the 95% confidence interval for the PLEX price which ranges from -20.403 to 150.002. That is, the confidence interval contains 0. However, the price for the lag of the PLEX price is statistically significant and positive. What this regression implies is that people in the LSI market are making their decisions based on the PLEX price, especially the lagged price.
Now for the regression with PLEX as the dependent variable and the LSI price and lag of the LSI price as explanatory variables.
Here we do not see the same pattern.
Based on all of this it seems more likely that the causal direction here is that PLEX prices are driving the LSI market more than the reverse.
Simple, there is an upper bound on how many SP farms you can have. For example, suppose it takes 5 minutes to extract the SP and get the injectors to your selling alt and putting them up for sale. There are 24 hours in a day. So at most you can extract from 288 characters assuming you donât eat, sleep, â â â â , work, or anything else. Since it is most likely the case that you will have to eat, sleep, â â â â , and so forth, the effective upper bound is lower as well. Further, opportunity cost says that as you approach this upper bound youâll face costs that are increasing at an increasing rate. You will have to give up increasing amounts of your free time to do this. Pretty soon you wonât be playing EVE youâll be playing just Skill Exraction/Skill Injector Selling and nothing else.
So the idea that people can just continuously increase the size of their SP farms is not really supported by either logic nor the data.
A) That extreme is possible.
B) You dont have to go that far.
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Teckos,
Youâre over-complicating this.
As I mentioned before, game time only plex customers have no interest in the other services a plex can buy.
Itâs a bit like me going to buy a car and then finding the seller has put on a personal number plate and wants me to buy the personal number plate for an extra ÂŁ1000 on top of the cars value, I then reply âerm, itâs only the car Iâm interested in mateâ He then starts going into details of why the number plate is worth so much and how much attention it will get me from women, then I say âNo thanks mate, I really only want the car just to get to and from workâ Then he says âtough!!!, the car is for sale only with the number plateâ I then tell him âno, thanksâ shake his hand and leave.
Can you see whats happened here?
The seller lost the sale because he didnât understand the car and the number plate serve different purposes. If he had sold the car and the number plate separately he would have got quicker sales for both items. The number plate had no value to the buyer because he does not care for showing off he only cares for getting to work and back using the car. Someone who actually is interested in showing off and getting attention from women would have brought the number plate alone no problem. My view is that the seller was not aware of the customers need and wasnât prepared to take some time to actually find out exactly what the customer wants.
Teckos, you make very interesting points and youâve presented your info very well. i just donât think what youâre saying encompasses everything.
We need 2 types of plex, one for game time and one for vanity/advantages. if this is done and the price for a game time only plex is still high then fair play Iâll shut my big mouth and be humble and accept theres nothing anyone can do.
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It is more like a feature was added that increased the demand and thus the price. Value is not determined solely by costs, but also by how much people value the commodity in question. Each car buyer values the car more than the price, and the car seller values the car less than the price. Adding features to PLEX has not effect the cost, at least at the margin (yeah sure there might be a one time cost that is either sunk or fixed, but that would not affect the price via costs). But if these features increase the demand where people who were not previously buying PLEX no start buying PLEXâŚwell the price in game will go up.
But is that bad for the seller? Sure they might lose your sale, but what if they got 2 more in addition to losing a sale to you. Now they are up 1 sale to where they would have been otherwise.
What you are suggesting is we have PLEX which would pretty much be aâŚoh I donât know a 30 Day Pilot License Extension, and for everything else weâd have another item, call itâŚhmmm let me thinkâŚhow about Aurum. So that those who want to buy vanity items, dual training, etc. will switch over to Aurum and the rest of us who simply want to buy game time with ISK from other players weâd buy PLEX.
I think we had that and CCP deliberately did away with it.
Now I agree that, that could be a way to reduce the price of PLEX. It would lead to a picture like the one I posted here, but in reverse (weâd go from Demand 3 down to Demand 1).
However, one point of caution. If ISK has been increasing and the population actually logging in and playing decreasing then the increased ISK in peopleâs wallets may limit the degree to which the price would drop if PLEX are luxury items (superior goods).
I get what you are saying and it might workâŚI just donât think CCP is going to reverse themselves on this one.
Uhh⌠we had aurum
You do realise I come from a time when you could get a 30 day plex for 350m isk? Yes your graphs show interesting information, I just wonder what a graph covering 2008 till now would show.
Teckos, peep this article.
Eve introduces âHours for Plexâ
As you can see the main reasons for the creation of plex was to help real life cash poor players pay for their game with in game currency AND to fight against RMT. Do we actually have a member of CCP here to explain why this was changed? or can anyone direct me to an article where they explain why they abandoned these 2 goals?
I canât compare the Aurum concept to what I am saying now, I believe you had to buy Plex and then convert it to Aurum which is very different from what I speak of.
We need to go back to the cool days when people could buy a plex for 350m, I am 100% certain CCP made a mistake here by adding so many different products into PLEX.