Some beautiful music to read the blog with

Sunday, 26 April 2015

Eve Prosper - a great interview with Dr Eyjo at Fanfest 2015

There is a cracking interview with Dr Eyjo at Fanfest 2015 hosted by Etienne Erquilenne on the blog of Lockefox on his blog at Eve-Prosper.  Lockefox is the host of the most excellent Eve market videos which i believe are a weekly "must watch" to keep up to date with what is happening on the market.

It is not an interview on how to make billions of ISK but more a discussion on the Eve Market itself.

Dr Eyjo used to be the Eve Economist until be joined the University of Akureyri back in June 2014.

I have talked about some of the lectures he has given in past Fanfest's, notably the Eve Online Economy talk in Fanfest 2014 and the Eve Online Economy Talk in Fanfest 2013

At 10:30 in the discussion on Inflation starts (perhaps very relevant for todays real life where yields and inflation are fast heading to zero and below!).  Dr Eyjo also talks about intervening in the market to keep Plex within set limits.

At 14:15 in the discussion moves to the price of Tritanium (described as the minimum wage for miners!).

At 21:50 in we get the killed comment/question from Dr Eyjo "why are people so interested in inflation [in Eve]?"

At 26:00 in Dr Eyjo reckons he could write a ground breaking paper on the Eve Online financial system and how it relates to the real world.

At 31:00 in, with a CCP employee in the room (CCP Quant), it is confirmed that there is no plans to intervene in the Plex market at the moment.  Indeed, the CCP employee referenced that any action is taken with the view to protect CCP (to me, that indicates that if the ISK price of Plex starts to negatively impact the value of Plex bought for US$ then CCP will step in).

At 35:00 there is a joking conversation about charging players for real time access to universal market data (it would be interesting to see if this could work).

At 38:00 in there is a discussion where the CCP employee states that he would want players to get their hands on all the data available within the limits of game design - but he puts in some caveats to protect players and their activities in the game.

Dr Eyjo had access to perhaps all the data he would ever need.

If i had such access, the first questions i would seek at answer are:

1) How much Plex is sitting in hangers
2) How much Plex is sitting in hangers of accounts that have not logged on in 6 months (i.e. Plex that is perhaps permenantly out of the economy)
3) How much Plex is sitting in hangers of active players but not being used (i.e. shows what Plex is being held as an investment)

Sunday, 19 April 2015

Eve Online Subscriber numbers (ex China) - i estimate 405k

[a non-ISK making post but one on CCP / Eve Online]

For what it is worth, i believe the CCP subscriber numbers are about 405k (give or take 20k).  Of which 339k pay in cash, and 66k pay using Plex.

Where is this post born from?

The recent podcast episode from Broadcast from the Ninveah pointed me in a post from The Nosy Gamer blog (which i had missed) that attempts to take two snippets of information from CCP to determine the number of subscribers to the game.

Firstly, CCP stated that "Eligible voters cast 36,984 votes, meaning that we have 15% increase since the last year’s election" [actually, that is not new news].

Secondly, CCP stated (in the same place) that "We have also noticed a 3% turnout increase since last year . . . " [that is new news].

From this information several bloggers and commentators have made their estimates as to the current number of Eve Online subscribers.

When was the last time we had decent Subscriber number data?

Two places.

1) the Prospectus issued during 2013 (for the Convertible bond issue) talked of subscriber numbers for the end of 2012.

2) the dev blog post on the CSM8 election results which gave the votes cast by country + Voters as a % of subscribers + % of subscribers back in April 2013.

The Dev Blog is simpler.  For the UK it states there were 5,787 voters representing 11.64% of the vote, giving 13.74% of voters as a % of subscribers and therefore 10.28% of subscribers (not easy to take in!).

The way i am reading that is in the UK there were 42,118 subscribers (=5787/13.74%) and so 409,707 total subscribers (=42,118 / 10.28%).  It seems to work with all the other countries to give me 409,707 players at that time.

Given the stated 49,702 votes, that indicates that 12.1% of the voters voted.

I am pretty sure that includes Plexed accounts - it does agree with work i have done before and reconciles roughly with information in the Prospectus.

Can we get from there to players at the end of 2013?

Work i have done before suggests there were an average of 476.8k players (subs + plex) during 2013.  See at the bottom section of this post for the workings.

Essentially, I have worked from the Eve Online (ex China) revenues, made assumptions for average time of a subscriber / average monthly payment / Plex vs Subs mix to get an answer for the average number of players in the year.

Given that, i assume that the year end number is about 7% higher than the average at 510k because of the upward trajectory in player numbers during the year.

And now to the current Population

We were told last year that the number of voters in the CSM9 election was 31,294.

We were told this year that the number of voters in the CSM10 election was 36,984.

We were told that the increase in turnout was 3%.  Now, the simple maths from all this is that:

[CSM10 voters/Population now] - [CSM9 voters/Population last year] = 3%

or, inputing what we know:

[36,984/Population now] - [31,294/510,000] = 3%

That suggests that the Population now is 404.8k.

My work on getting the 2013 population numbers

Below is the relevant part from my spreadsheet that tries to look at revenues generated from subscribers.

Not easy.  Also, it looks at average number of subs in the year, not year-end.

Almost all of the workings come from the Prospectus in 2013 for the Convertible Bond issuance.

Starting from the top i have:

  • Average number of subs players in the year (excluding Plex players)
  • Average lend of sub (i assume 10 months given the steep learning curve)
  • How the sub players payment periods are split 1 mth / 3 mths / 6 mths
  • Cost per month sub for each period
  • and therefore the effective monthly payment from each sub
  • Gives total Sub revenues for the year
  • Then i make an assumption of how much comes from Plex in the revenues
  • That gives me the total revenues
  • Below that i try and split those Plex sales into players vs investors

Gives me an average number of players in 2013 as 476,750

For the above, i assume the 2013 year end players are 7% higher than the average given an upward trajectory during 2013 = 1.07 x 476,750 = 510k.

As a check, if i assumed 2014 was going to end 10% below my estimate of the average for 2014 then i would get 0.90 x 449,928 = 405k (which agrees with my estimate above).

Eve Online - ex China
2011 2012 2013 2014F
Number of subscribers 355,000 355,000 404,838 383,734
change 10.9% 0.0% 14.0% -5.2%
average length per subscriber (mths) 10.1 10.2 10.1 10.1
10.1 10.2 10.1 9.9
Price per subscription for 1 mth 60% 60% 60% 60%
Price per subscription for 3 mths 30% 30% 30% 30%
Price per subscription for 6 mths 10% 10% 10% 10%
100% 100% 100% 100%
Price per month
Price per subscription for 1 mth 14.95 14.95 14.95 14.95
Price per subscription for 3 mths 11.36 11.36 11.36 11.36
Price per subscription for 6 mths 9.55 9.55 9.55 9.55
Average subscription 13.33 13.33 13.33 13.33
Subscription revenues 47,851,724 48,325,295 54,516,821 51,674,859
change 8.2% 1.0% 12.8% -5.2%
Sales mix
Subscriptions 77% 77% 76% 75%
Plex sales (to play, not hoard) 23% 23% 24% 23%
100% 100% 100% 100%
Plex sales (to play, not hoard) 14,293,372 14,434,828 17,215,838 15,846,957
change 14.6% 1.0% 19.3% -8.0%
Price per Plex 19.95 19.95 19.95 19.95
Number of Plex sold (to play, not hoard) 716,460 723,550 862,949 794,334
Number per month 59,705 60,296 71,912 66,194
Additional "accounts" as a % of Paid accounts 17% 17% 18% 17%
Total Revenues 62,145,096 62,760,123 71,732,659 67,521,816
change 9.6% 1.0% 14.3% -5.9%
Total Accounts + Paid & Plex (average) 414,705 415,296 476,750 449,928

If required, i can go deeper into my workings and thinkings.

[Edit: corrected Typo, Ninveah instead of Nirvana!]

Sunday, 12 April 2015

Eve Fanfest 2015: Confessions of an EVE Trillionaire

In this years Eve Fanfest 2015, instead of the usual Eve Economy talk there was a player talking about their route to making 1bn ISK.

Well worth watching:

The player gives a potted history of his route to a trillion ISK over 20 minutes.

At about 3:00 in he talks about how he stumbled into Trading.

At about 3:45 he talks about starting with 20m ISK and making his first billion using Regional Trading.

He talks about his mistakes and rage quitting.  Borrowing 2bn ISk from corp mates (7:00 in).

At 7:40 talks about moving into the Plex market.

At 8:00 talks about using Patch note information to make 9.5bn profit.

At 9:15 talks about what tools he uses.

At 10:20 he talks about going to the (market) forums to borrow ISK using a trusted third party and collateral to invest about 440bn ISK in a project, making 74bn ISK profit.

At 13:00 he talks about Plex prices ending up with the observation that volumes are falling and prices are rising.

At 16:30 in he gives an outline guide on how to set up a strategy given the constraints of Time available / Cost / Risk appetite.

Sunday, 5 April 2015

Bond Repayment and a Recapitalisation of CCP?

[this is not an ISK making post but one that focuses on the company CCP]

Convertible Bond Redemption

I have just noticed that CCP has decided to redeem their Convertible Bonds that they issued in mid 2013.

The reason I have only just noticed is that the announcement is in Icelandic and not on the CCP website - that may suggest a bigger matter is underway here, more on that below.

The redemption is not a bad idea given the interest CCP had to pay on the $20m bonds was 7% (I.e $1.4m per year) and this bond was due for repayment in July 2017 anyway.  In today's world of falling yields that is an extremely high rate.

What is interesting though is CCP does not have the ability to repay this $20m (plus any outstanding interest).

Therefore, CCP will need to replace this $20m convertible with new debt.  That is quite normal, most companies roll over their old debt into new debt.

The hope is that CCP will be paying a lower interest rate given how rates have fallen globally (CCP should be able to halve their interest rate) + most of CCPs revenues are not in Iceland ($/Euro/GBP revenues paying $/Euro/GBP debt) + Iceland is getting closer to rejoining the international financial markets anyway.

This whole transaction perhaps explains why the 2014 accounts seem to be later than usual (I.e. not out yet).

Worth noting that the original prospectus allows the bond holders to take shares of CCP instead of repayment.  The redemption notice was given on 27 March 2015 and so the holders have 30 days to notify CCP if they want shares instead of cash.

"Prior to any voluntary prepayment of the Bonds, each registered Bondholder will receive at least thirty (30) calendar days’ advance notice, and during such period will have the right to convert its Bonds to common shares in lieu of the voluntary prepayment."

That may not be a bad idea given how profitable CCP could be if all it did was just Eve Online.  Though I am surprised, therefore, that the 2014 accounts are not out to give the bond holders an idea of how the company currently looks.

Something Bigger going on - like a Recapitalisation?

This all suggests something bigger at CCP, indeed it is possible that CCP is going through a recapitalisation process - an action that companies undertake when their balance sheet is under pressure and they need new capital to continue, either from new or exist shareholders (sounds the most likely action here) or from the banks swapping their debt into equity (sounds unlikely action here).

When i review my forecasts for CCP i was assuming that the revenues in the second half of 2014 were the same as the first half leading to a 6% decline in Eve Online 2014 revenues compared to 2013 revenues, and after China sales a 4% total decline in revenues.  That may prove to be optimistic - but lets stick with it for now.

I then struggled to work out the R&D (a lot going on) but i suspect the company was going to make about $13.8m EBITDA (earnings before interest, tax, depreciation, amortisation) but a total loss of $23.3m.

In all, that would leave the company with a net debt to ebitda ratio of 1.3x.  If it gets to 1.5x then the debt holders start to get more control (i.e. the debt covenants are set at 1.5x ebitda).

The full post i wrote back in September on the CCP financials is here and demonstrates how 2015 will be a tougher year under the current balance sheet structure (i.e. with the $20m convertable bond debt) . . . . . i am though missing a lot of information to make head or tail of all the underlying actions.

I suspect, now that the decision has been taken to effectively cease / reduce spending on World of Darkness and Dust514, the company is in a better position to attract new capital to overcome the gap left in the balance sheet from the above two projects.

My personal view is that Eve Online itself is a very profitable though low growth venture and the surplus cash flows can be used to fund another project.  Unfortunately, World of Darkness and Dust514 did not work out as planned and the company saddled itself with expensive debt in the process which has put it in a tight spot.

I believe the company may be drawing a line under this all, perhaps adding new shareholder funds to the balance sheet and swapping the expensive Convertible Bond debt for cheaper debt.  In doing so, CCP will have a good profit stream from Eve Online, a new venture in Valkyrie and will be pondering what to do with Dust514.

In all, this should be good news for CCP and Eve Online.

[Edit - corrected Dust517 to Dust514]

Sunday, 22 March 2015

Update on my Business Activities in Eve

The focus of my business activities in Eve is starting to shift.  Below is a summary of what i am doing.

Worth recalling that the aim of my business activities is to spend no more than 45 minutes a weekday on Eve + each activity must be able to generate at least enough ISK to purchase a Plex a month.


This is working well.  I make up to 15bn ISK per month for what is half an hours work each evening.

I am slowly expanding the set of items i manufacture to sell.  I make good margins here though they are slow moving (just how i like it).

Currently, i sell in the 4 trade Hubs + 4 other regions, though i may scale back in Jita given it is quite competitive.


This was where i started but i am now winding it down.  The big constraint i now face is that real life (i.e. work) is taking up more and more of my free time whether it be working at home or business travel.

Part of trading is to constantly review what I am selling and filter out the low margin items and find new high margin items to sell - that needs a degree of focus and travelling on business does detract from that!

Hence, for now i will focus on a few highly valued items (i.e. prices over 500m ISK).

Planetary Interaction

In all i made 1.7bn ISK profit from Planetary Interaction.  Mainly hauling P2 materials to my factory planets and selling the resulting P3 materials produced.  Occasionally I would haul P3 items and sell the resulting P4 items.

I am able to make enough a month to finance a Plex whilst spending very little time on it - which is my aim.

This could be a real ISK maker.  So, once i review the set up i suspect i will keep this going.

The margins are about 20% - so pretty healthy.

Plex Trading

I made about 26m ISK through buying and selling 21 Plex until real life caused me to move on.

At this stage i will leave it on the back burner and see if i can get it to work more efficiently at a later stage.

It is a useful business to park surplus ISK into though the margins are very low (1-3% after all costs).


It has crossed my mind that i do spend about 3 hours a day working from home in the evening and many hours working at home in the weekend.

Therefore, i have decided to start mining and see if i can get this to operate in the background whilst i work.

I plan to get my two alts in Jita (on different accounts) set up for mining and see what i can make with them both out on the job.

At this stage, i am viewing it as playing Eve in the background and making ISK whilst i do.

Back of the envelope calculations suggest that this should achieve the goal of making a Plex a month.  We will see.

(i have to admit, when i watch the video clips of miners, it does look incredibly relaxing!  Could be tricky to weave into trying to work at home in the evening though).

The results

More of this in another post, but in summary my monthly profits vary from 16bn ISK to literally nil.  16bn if i am not on business travel, nil if i am away at lot!

The chart below shows the monthly profit i make since i started back in May 2013.

It can be seen from the above chart that i was on business travel in last August (2014), November and February (renewed my gold cards at BA and Emirates, so can't complain!).  Otherwise i tend to make about 10bn ISK a month.

It is fair to say that my real life work has somewhat dented my progression.  Given my planned business travel in April it is unlikely that i will make 100bn in the 12 months to the end of May - as the chart below shows.

The chart below shows how my wealth has progressed since i started back in May 2013.  The red line shows the average profit per day i make (i.e. the monthly profit divided by the days in the month).

My ultimate goal is to make enough ISK to buy a Plex a day whilst constraining myself to the 45 minutes per week night.

I suspect this is achievable.

Of course, an underlying goal is to enjoy my time in Eve - which is being met.  So good news there.

Sunday, 8 March 2015

Eve 101

Continuing on from last week's post on useful quick videos:

I found  this website recently, Eve 101 (actually, i think i heard about it on the Crossing Zebras Podcast given it is part of Crossing Zebras).

It consists of a series of quick 5 to 10 minutes youtube clips going through the basics of Eve Online - so very much aimed at the new player.

So far nothing market related.

But some nice videos nonetheless.

Full list so far:

1. Key Concepts
2. The Pilot
3. The Ship
4. Modules
5. Drones
6. Player Groups
7. The Station Interface
8. The Neocom Menu
9. Ship User Interface

Saturday, 28 February 2015

Eve Online Videos - MagnasisEVE - some newbie guides

One of the Youtube channels i subscribe to is MagnasisEVE

He posts videos typically more than once a week one all aspects of the game.

However, what caught my eye was a recent series of six videos that focused on earning ISK for new players.

all titled the "Rookie Guide:" and covers Mining; Planetary Interaction; Missions; Gas Harvesting; and Salvaging.

It may not be talking making billions but it does nicely introduce a new player to some of the routes to making ISK other than through trading and manufacturing.

His recent uploads are also worthy of a look for ISK making ideas and general game play.

Embedded below is the playlist for the "Rookie Guide"

  1. Adding Color to Your Overview (time 10:30)
  2. Salvaging for ISK (time 18:28)
  3. Gas Harvesting for ISK (time 09:05)
  4. Missions for ISK (time 23:06)
  5. Planetary Interaction for ISK (time 28:53)
  6. Mining for ISK (time 26:31)

Saturday, 21 February 2015

Someone made a Plex blunder

I noticed this when looking at the Plex market in one of the regions.

As shown in the image below, someone sold at least 1 Plex for 8.1m instead of the intended 811m (i suspect).  I can only assume this must have been a key input entry.

The image below shows where the current Buy and Sell orders were sitting:

The point here is that the market mechanics allowed the unfortunate seller to not even achieve the highest placed Buy orders but infact fill the best placed Buy order with the erroneous input Sell price.

Now, i am not sitting here suggesting the market mechanics need to be sorted out to prevent this from happening (Eve, after all, is Eve) but there has to be a good argument for having a toggle switch which the player can set to allow all sell orders they place to be, at worst, immediately settled by the best Buy order.  This will not save the Seller from avoiding the sale going through but it would at least prevent what has happened above.

It is very hard to think of a order driven market where the above can be allowed to happen in real life.

For sure, this would not help where there is only one Buy order of 1 ISK.  But it will help in many cases.

I also suspect that this would prevent some in game "money laundering" where the origins of illegally purchased ISK is disguised by making multiple transactions through seemingly unrelated players at little cost.

I only hope the seller of this Plex had not spent $15 on its purchase.

(For the record, the blunder was not committed by me!)

Saturday, 7 February 2015

CSM9 Winter Summit - discussion on Plex

In the CSM9 Winter Summit there was a discussion on Plex which perhaps deserves more attention for those holding and trading in Plex.  The relevant part is below and my 6 bullet point summary is below that:

"The next topic was PLEX prices. The price has dropped recently from recent high prices (around the 1 billion ISK mark) to around 800mil, but it did dip down to 700-600 mil. CCP Thomas also showed some statistics related to customers using PLEX for subscription. There were some discussion about whether CCP is manipulating the market at present and what their metrics are in that regard. There were some questions regarding player manipulation of the PLEX market, which CCP confirmed as happening just like any other item in game.

There were some questions about the conversion rates following "This Is EVE".

There were more questions about PLEX prices and whether there was a target price. CCP Thomas explained that there wasn't a set price they were targeting, and it was more about the delta in prices. There was discussion about player reactions while PLEX was around 1 billion ISK, and the actual number of players using PLEX was relatively stable.

 There were also some questions about the number of PLEX used for other services, especially multiple character training. At this point, CCP Foxfour also explained that they wanted to move away from people directly buying PLEX and instead move to people just buy AUR. This AUR could then instead just be used to buy PLEX from the NES store along with everything that is currently using PLEX, moving from a three currency system to a two currency system. There were questions about whether it would be possible to directly trade AUR for ISK on the market. CCP Cognac responded that there are no plans to do so. Sugar Kyle brought up the topic of sending AUR to other players. It was explained that while it would be desirable in some contexts (such as gifting someone else some AUR) there are some issues, including some legal ones that need to be covered."

Source: CSM9 Winter Summit Forum Post

The summary of the above is:

1) CCP knows how much of the Plex is being used for Subscriptions vs Other Services vs holding for investment

2) CCP knows / believes the Plex price is being manipulated by some players

3) CCP is more concerned with the change in the price of Plex, not the level

4) When Plex hit 1bn the number of players using Plex remained stable

5) And, the interesting part, CCP may want to move away from Plex for US$ towards Aurum only.  This Aurum would then be used to buy Plex as normal

6) No plans to trade Aurum on the market for ISK

The key points of interest are (5) and (6)

Firstly, the bad news is that CCP may break the direct link between US$ and Plex by gettung Aurum in the way.

Secondly, the good news is that Plex will still be the way to extend Play Time and for Other Services.

But, the route to Plex could be interrupted by a Player stopping at the Aurum store and spending the purchased Aurum on something else instead of Plex.  In other words, the change CCP is thinking about can only reduce the supply of Plex (or leave it as before, at best).

That, all things being equal, would push up the price of Plex.

However, all things are not equal.  Aurum can already be used in the place of Plex (and the other way round).

In Jita prices (1st Feb 2015):

It costs 3500 Aurum to do Dual Training vs 1 Plex at 800m ISK.  That implies 1 Aurum is valued at 0.23m ISK.

1000 Aurum is selling for 500m ISK and buying for 200m ISK (not a very liquid market - hardly trades at all) which implies 1 Aurum has a spread of 0.20m - 0.50m

It I assumed the Buy orders for Aurum were fair, then the current Aurum / Plex price is about right.

So far.

(edit: edited the price of aurum to reflect i missed the "m", i.e. 0.23m ISK not 0.23 ISK per aurum)

Saturday, 31 January 2015

Trying the Plex Market

Having started to read the Merchant Monarchy blog, notably MoxNix focusing on the Plex market - i thought i would give it a shot also.

This would be a departure from my normal strategy of focusing on low volume / high margin items.

Much like MoxNix, i would be going for volume, using Buy Orders and then putting on any bought Plex as a Sell order, making a low profit margin in the process.

As ever, when i enter a new market i dip my toe in first to test it out.

My strategy is to operate in the regions neighbouring a couple of major Trade Hubs.  Plex trading in the Trade Hubs is intense and the margins very thin - however, a jump or two away in another region is much calmer.  Margins are not great but the competition is not so intense.

I put on a few Buy orders and then check back a week later to convert any completed Buy order to a Sell order - in other words, i am Station Trading Plex.

In this case, i bought 13 Plex for 10.2bn ISK with my alt in Jita and my alt in Dodixie (both travelling to a neighbouring region to do the trades).

So far i have sold 11 - the regions neighbouring the Forge sold quickest, the regions neighbouring Sinq Laison sold slowest.

In all, sales so far are 9.1bn ISK and Plex for sale that i still hold is 1.6bn ISK which gives me profits of 429m ISK so far (or 39m ISK per Plex) in January.

Not bad but slow.  I suspect i will need to deploy more ISK into this.  However, the margins are very low - about 4.7%, and that is before i pay the broker fees and sales tax.

Given my broker fees for placing Buy and Sell orders are 0.75% and Sales tax is 0.90% that would indicate a profit margin of 2.5% per sale (=21m per Plex).  Assuming a Plex price of 830m then to achieve my aim of making sufficient profits to buy a Plex each month then i need to sell 40 Plex per month.

If i was to assume that was 10 per week and lets say i therefore need to have 10 Buy orders up to stock up for the following week and 10 Sell orders up to sell last weeks Buys then that implies i need 20 Plex worth of Isk investment = 16.6bn ISK to invest in this project.

The good news is that it is very low maintenance.  I put Buy orders up and then the following week i convert the completed Buy orders into Sell orders.

Given i don't have any other projects to deploy my surplus ISK into i may stick at this and see if it achieves my golden rule of being able to earn a Plex a month.

In fact, i have just invested 7.8bn in 10 Plex Buy Orders in one region and 3.9bn in 5 Plex Buy Orders in another region to see scale up slightly and see how it goes.