If you're making a few billion ISK a week, why not buy twelve or twenty-four plex, fund a main and an alt for the next year? That's certainly going to increase demand and lower supply.
It could explain why the recent plex sales by CCP haven't put much of a dent in plex prices (as they have in the past). The people buying the plex are rich. There's no need to buy plex from CCP, as their characters are already sitting pretty on game time for the next year and already flush with ISK.
Economically it's quite complicated.
ReplyDeleteFaction warfare cash-outs remove isk from the economy. Players trade isk and loyalty points for items. It's a faction item faucet and an isk sink.
Normally when the money supply shrinks prices go up. It's the opposite of a nation printing out loads of bank notes and causing its currency to devalue.
So why do we have both a shrinking money supply and inflation?
My theory is that there was a lot of stagnant isk in the economy. People (including plex speculators) were sitting on trillions with not much to do with it. The arrival of large stocks of cheap faction ships implants etc has freed up a lot of this isk from being stagnant. So instead of one guy having several trillion isk that guy now has several trillion isk's worth of Fleet Tempests he bought cheap and FW runners have his isk. And they spend it, as most nouveau riche Eve players do, on extra accounts.
Incidentally mining is the same - an isk sink and item faucet. Isk is spent on insurance, trading fees and so on while mining never creates fresh isk into the economy. And mining is also creating nouveau riche Eve players.
If this theory is right then we may see a decrease in the amount of stagnant isk being released soon. Which means people will stop buying plex in such amounts. Coupled with an increase in plex sellers because they perceive such a good deal just now.
However there is an awful lot of isk in the economy plus Retribution may alter things so don't count on plex dropping. I just think it's quite likely to.
"Faction warfare cash-outs remove isk from the economy. Players trade isk and loyalty points for items. It's a faction item faucet and an isk sink."
DeleteThis is incorrect, faction warfare cashouts add isk to the economy. Players trade isk and loyalty points for items, but LESS isk than was needed to obtain these items via the traditional LP stores. So, by being a smaller ISK-sink than what they replace, FW cashouts function like an ISK-faucet.
However, your larger argument is correct, FW is mainly raising plex prices by creating nouveau riche players who are stockpiling and using plex.
It's more complex than that. If a player stops ratting (almost pure isk faucet) and does FW instead he's destroying isk rather than creating it. Similarly some of the popular 2011 activities notably incursions.
DeleteAlso comparing level 4 missions with FW, level 4 missions comprise some isk faucet elements (rat bounties, mission isk rewards and on time bonuses) to compensate for their higher isk destruction per LP cashout.
Interestingly the new system being proposed for Winter may see FW LP cashouts become just as isk-destructive as mission LP cashouts while still being the best way for an inidividual player to make money. At that stage we may see isk leaving the economy very fast indeed.
It's not 'incorrect', it's just not as simple as it seems.
DeleteFW LP is still an isk sink, but as you rightly point out the overall effect on the eve economy is not black and white. For example if incursion runners move to FW (swapping an isk faucet for an isk sink) then isk in the economy will be reduced. If mission runners switch to FW, isk in the economy will increase (swapping a bigger isk sink for a smaller isk sink). If PVPers who would normally have sold PLEX start FWing for that isk (net neutral to isk sink), isk is reduced. And so on.
It's still true that FW is an isk sink, but the presence of that particular isk sink doesn't necessarily remove isk from the ecomony when you look at the wider picture.
No, stabs is spot on. Do the math here - where is the isk *generated* that you are calling a "faucet"?
DeleteFW LP stores use less isk than other LP stores, sure. But they still *use* isk, not spit it out like an ATM.
Anom#1 again:
DeleteSo, let's imagine you do a bunch of FW missions, collect a few billion LP, and trade it all in for stabber fleet issues (with normal stabbers, of course). Are these insurable? Is the insurance payout greater than for a normal stabber? Is this a giant ISK faucet? I've been operating under the assumption that it is but perhaps the insurance doesn't work like that. I'm not sure what you guys imagine people are buying with the LP. My understanding is that they are buying implants at reduced isk cost, functioning as a "virtual isk faucet" when compared to the old way of buying implants, and that they are buying faction ships, which seems to be to be an actual isk faucet, although I haven't tested it personally. Do you guys think that the majority of faction LP is going to buy anything else, things that function as isk sinks? Interested to hear your specific factual theories as to which items are being purchased and what their effects are--although again, I don't actually think that plex prices are being driven by inflation, so this is pretty much a pointless debate.
Mining does 'create' some ISK: ore is mined, processed into minerals, built into ships, and finally those ships are destroyed, resulting in an insurance payout.
ReplyDeleteI don't think this is a very significant source of ISK compared to bounties, though.
At some point in the past CCP revealed that insurance is a net isk sink. The amount paid in premiums is higher than the amount paid out. Apologies, I don't remember the source.
DeletePLEX prices generally aren't an indication of inflation, they're an indication of how easy it is to make isk. If you think of regular isk-making activities (mining, ratting, L4 missions) as a baseline, anything that makes isk-making easier or more plentiful than those activities will see a rise in PLEX, as not only are more people making more isk, but less people are selling PLEX.
ReplyDeleteFW sends that idea into overdrive, as making billions in short amounts of time is completely trivial, hence PLEXes are a very attractive option for buyers and a lot less necessary for sellers. Fixing FW will stop them from skyrocketing in price like they're doing, though who knows how long it'll take them to come down to sanity (assuming they ever do).
It's seriously ridiculous how long it's taken CCP to fix this issue.
Yeah. That's why I didn't make mention of inflation. Plex are mostly decoupled from the rest of the economy.
DeleteI would think it's the tournament CCP is hosting that takes like 20 plex for entry, but you're probably right. Now that faction warfare has been making tons of money for a few months, the prices of plex jump for no apparent reason.
ReplyDeleteWill drone nerf and fw nerf lower plex prices?
ReplyDeleteThe high demand should start tapering off, now that FWers aren't going to be flush with cash every two to four weeks.
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