Some beautiful music to read the blog with

Sunday, 5 July 2015

An update to my business efforts

So, real life has been in the way, big style.  Looks like it is starting to calm down, so time to take stock of what I am doing in Eve.


Current wealth is 208bn ISK.

Made up from 85.0bn of sell orders + 2.6bn of buy orders + 3.6bn of items sitting in hangers waiting to be put on as sell orders + 47.8bn of ISK sitting doing nothing + 85.8bn of Plex - 17.0bn of provision against these sell orders in case I need to drop the prices to sell them.

As has been the case for a long time, if I am able to log on for at least 45 minutes each day then I make 7bn ISK per month.  When real life is busy I make less (sometimes close to nil) and other times I make more - as shown by the chart below:

What is really holding me back though is not the lack of time logging in, it is that 47.8bn of ISK I have which is just sitting there doing nothing.  That is dead money.  All i know about that 47.8bn is that it will still be 47.8bn next week.


I own 94 Plex for investment purposes.

I last entered the market to buy Plex in March 2015, buying 22 at 798m each.  In total I have spent 66.8bn on Plex vs todays value of 85.8bn - so I have made a gain of 28.5%.  Not bad, and so the Plex investment is doing what it is meant to do and growing my wealth rather than sitting gathering dust as ISK.  The post where I went through the reasons I chose to invest in Plex rather than some other item is linked.


I still have 2 accounts each with 3 characters.


My strategy remains unchanged.  I am looking for slow moving products to sell at high profit margins (minimum 20%).  This is in contrast to other (much richer) traders out there who look for fast moving but low margin items to sell.  My style suits my play time, I feel.  I am trying to avoid the competition whereas the other traders take them on (and win).

An item that I can buy for 100m ISK from Jita and sell in Dodixie for 130m in 5 days time with no maintenance to the sell order is fine with me.  In fact, that would be just ideal.  If i had 5 products that did that then i would earn 150m ISK over 5 days for 500m ISK invested.  That is close to getting me a Plex a month.  (before taxes etc etc but you see my point)

My overriding aim is that each business venture must be able to Plex an account per month and my total time spent on my businesses each day must not exceed 45 minutes.

Business locations

I operate out of a number of locations.  The aim is to make Jita the center of operations which collects all items in to have them hauled out to the selling locations.

  • Jita - this is the center of my operations.
  • The four other main trade hubs from which I sell items bought at Jita or manufactured from Lonetrek: Amarr; Dodixie; Hek; and Rens
  • Five (soon to be six) other smaller trading locations from which I sell items bought at Jita or manufactured from Lonetrek.  These are really low maintenance.  I have no competition but not many buyers either!
  • One manufacturing location in Lonetrek.

Everything happens in Highsec.


I contract out all my hauling of items from Jita to the four other main trade hubs.

Roughly, i have issued 690 contracts to haul 845bn ISK of items which has cost me 16.5bn ISK.  i.e. contracting out my hauling has added 2% to the cost of my items.  Given my profit margins are so high, that is fine by me.

Business Ventures - active

I have moved from trading to manufacturing T1 items as my main source of income.


  • This is much more lower time maintenance than trading which suits my style.
  • I focus entirely on T1 items and a few T2 items.  I am slowly expanding the T2 items as I go - though until i get my head around invention i have to rely on buying T2 BPCs which have varying material requirements.  At least with my T1 BPOs i know their material requirements so my spreadsheets can tell me what materials to buy for what i all want to manufacture.
  • I manufacture all my items in Lonetrek and haul them to Jita
  • I manufacture to replace items sold - so i don't carry spare stock if i can help it
  • I buy all my raw materials in Jita and haul them to Lonetrek to undertake the manufacturing
  • I focus on items that no-one else really sells.


  • This is all about buying from Sell Orders in Jita and hauling these items to my selling hubs to sell.
  • I have scaled back my trading to some high value items I buy from Jita to sell in other other trading locations.  I easily make a Plex from all this.  It is lumpy and slow but reliable.
  • I trade high value items such as implants and blueprints.
  • I probably make between 1 and 3bn ISK a month on this.  Once i nail down the small number of items i want to trade in it should be more.

Planetary Interaction

  • I almost entirely produce P3 items for sale.  I buy P2 items from the market and haul them to my 15 (soon to be 20) factory planets to produce the P3 items.
  • I always have some P3 items on the market to sell.  I tend not to move their price.  So, i only produce to replace sold orders.
  • I don't change the P3 item that i produce - the thought of all that clicking on the factories appalls me!
  • I tried to do P4 items - but they all tend to be loss making if you start from buying the P3 items from the market.
  • I don't own any customs offices so i tend to may planetary tax.  I always aim to have tax rates at below 10%
  • In all, i suspect i make about 1bn ISK per month on this.
  • Nice passive income, not overly reliable though takes up little time.

Plex Trading

  • I am dabbling here - and currently i barely make anything.  I may drop it.

Business Ventures - not active

Station Trading

  • I tried this a while ago and I could not master it.  I may rethink how to do it.  But, more likely, I will just not do it.


  • That went right onto the backburner almost as soon as i started it.  Felt too complicated at the time - i am taking another look at it.


  • I tried this out to see what it was all about.  I would have to say that it is useful to mine when catching up on all the Eve podcasts / videos of the week.  I imagine a fleet mining operation would be quite relaxing and enjoyable.
  • It does not make me anything so i don't count it as a business venture - but it does give good time to catch up on things whilst mining in the background.

Business Ventures - in the works


  • I have set up a POS near one of my selling hubs as an experiment.  No idea what to do with it.
  • I am looking to set up another near my manufacturing location to start to research the BPOs i have.

Low Sec / Nul Sec

  • I would love to do something there - just no idea what or how, for now.  And the place just sounds to terrifying for me.

  • i bought an Obelisk - i have no idea why.

Saturday, 13 June 2015

This just breaks my heart - a Plex blunder

Every time i see someone miss-sell a Plex it just breaks my heart.

In the image below it appears someone has sold at least one Plex at 910 ISK when i very much suspect they meant to sell at 910,000,000 ISK.  A classic miss-posting that can occur in Eve.

The current view is that the sandbox nature of Eve Online means that players must live with those mistakes - CCP are not here to protect players from themselves.

In the above case, this could be a Plex trader - in which case that is less of an issue.  They can take such losses and likely make such a mistake every so often.

It could though be someone who has spent $15 to buy a Plex and miss-sold it on the market - that would be a bigger problem.  i would hope they get their due ISK if they put in a ticket to CCP.

However, it does point to the flaw in the current market system.  On today's exchanges - Sell orders that are priced below posted below Buy orders are settled at the price of those Buy orders.

So, in the above example, the Sell order would have sold at something like 868,000,000 ISK even if it was posted at a mere 910 ISK.

I am no coder - but i wonder how much additional time and resource this would require?

Sunday, 7 June 2015

The Plex Account

A while back i discovered that i was collecting too much surplus ISK and i needed something to invest it in - which lead to me to investing in Plex.  My thinking was that this was the one item in game that could keep pace with inflation in Eve Online.

Don't look at the mineral prices as a guide to inflation - look at the ISK cost of keeping up with the game as a guide to inflation in Eve Online, it is going up.

My reasoning what that the ideal characteristics of such an investment would be:

  • Price linked somehow to the rising wealth in the game though i also want the price to be independent of individual specific items
  • Controlled supply - i want the supply of my investment to be limited or restrained so that as a scarce resource its value can grow as wealth in the game grows
  • Readily converted to ISK no matter what the environment - come war, peace, patch, expansion, you name it i want my investment to be recognised by all players at all times as something of value
  • Sufficiently liquid to convert to ISK in a short period of time - i.e. i can sell my investment very quickly into the market for a fair price
  • Power Proof - i don't want any player / alliance power base able to control the price of my investment
  • Patch / expansion proof - i don't want my investment to be materially reduced in value on the whim of a change in a patch or expansion.

Which lead me to Plex.

Well, one year later i now own 94 Plex valued at 83bn ISK.

In all, I have entered the market 6 times to buy those Plex and by average gain has been 24.2% (a range of 38.8% to 10.6%).

So far, at least, my theory is holding true on investing in Plex.

However, it is fair to say that whilst i meet one side of the CCP aim of Plex (i am providing liquidity to those players that which to sell buy Plex for US$ and then sell that Plex for ISK), i am part of the player base that is forcing the price of Plex up (i don't plan on selling my Plex any time soon).

Saturday, 30 May 2015

CCP Financial Statements for 2014 - a review

The CCP 2014 Financial Statements were filed at the Directorate of Internal Revenue on 19 May 2015.  I have a (legally) obtained copy and discuss them below.

I have filled in the main numbers on my CCP Financials (as published) page to allow a quick comparison to prior years.

I have also created new page "CCP hf. Consolidated Financial Statements for 2014"
 that recreates the 2014 accounts as near as practicable to their original form (omitting parts that are largely irrelevant for our purposes) and so to allow others to take the information and analyse it themselves.

A bit of background

Iceland, much like the UK and other countries, requires all companies (both public and private) to file their Accounts within a certain time such that they be kept on record and can be viewed by the public.  There are good reasons for this which are beyond this post.  For the UK, anyone can go online to Companies House, or private websites, and download a copy of any UK company for £1.  In Iceland, you need to fill out a form and, for the required payment, they email you the accounts.

The 2014 CCP hf. Accounts can be found on the website of Directorate of Internal Revenue, click on the "+" sign beside the phrase "
Gögn úr ársreikningaskrá".

And if you brush up on your Icelandic you can find the right form to fill in and the accounts will be emailed to you for a fee.  Note, you need to navigate the Icelandic version of this site (google translated if required), the English version seems to bypass all the company data pages.

And so onto the 2014 Accounts

For the record, I maintain that Eve Online is a very profitable, cash generative and low growth game which is standing the test of time (up their with very few other games).  Perhaps where CCP has fallen down is how it uses that cash on other projects - and 2013 and 2014 was all about cleaning up that mess.

Remember, we already had the accounts for the 6 months to June 2014, so the focus is on the 6 months to December 2014.

The Summary

As a result of all the write-offs of Dust514 and World of Darkness, some general cleaning up of the Balance Sheet, and i suspect some accelerated amortisation of Eve Online Development costs, CCP reported a loss of $65.6m.

It is hard to separate out totally the write-offs to get an underlying feel of how Eve Online is doing - if i could, i greatly suspect we would see a nice profit.  We won't really know until the June 2015 accounts are released by CCP.

If i had to estimate the underlying profits then i would add back:
- $29m write-off of Dust514 and World of Darkness
- $46m accelerated amortisation of Eve Online Development Costs (my estimate)
- $3m additional interest cost

. . . . . and that would give me pre-tax profits of $11m.

The feeling here is that CCP have rebased the company and Financial Statements back to something more conservative and solid.  Which is sensible ahead of what looks like the recapitalisation of CCP, which is what i suspected back in April when CCP announced it was repaying its expensive Convertible Bond.

For what looks like a large loss, the company did actually generate a little cash in the year!


Full year revenues fell 10.6% to $68.6m.  In the second half of 2014 revenues fell 19.9% when compared to the second half of 2013.

It has hard to know how much of these revenues were in China, personally i estimate strong Chinese growth from $1.8m in 2013 to $3.5m in 2014.

Broadly, all the gains in revenues made in 2013 were given back in 2014.  Revenues in 2012 were $65.3m which is broadly where 2014 ended up.

Revenues fell in all geographies - so we witnessed a broad based pull back.

Don't forget that the US$ was strengthening against the Euro - so European sales will have this headwind against them.


The accounts themselves do not state the number of subscribers in Eve Online.


Now, working out what is linked to writing off Dust514 and World of Darkness and what is linked to Eve Online and Valkyrie is key to working out what is the ongoing underlying level of R&D and therefore what the profitability is of the rebased CCP business.

However, it is not clear in the Financial Statements but i can tell that not only has CCP written off all the Dust514 and World of Darkness but it appears also to have accelerated the amortisation of some of the Eve Online development.  This may reflect the new policy of releasing content more frequently.

That is the only way for now i can explain Development Cost on the Balance Sheet being $13.6m.  It has never been that low.  Back in 2009 it was $37.6m.  This may also reflect CCP just clearing the decks ahead of a recapitalisation.

(The $14.3m Carrying Amount includes a Trademark of $0.7m).

In the full year the company charged $86m to R&D.  I am confident that $29m were write-offs (most likely Dust514 and World of Darkness).  So what started in 2009 has no come to an end.

That leaves $57m.  I greatly suspect most of that related to an accelerated amortisation of Eve Online Development costs.

In 2014, $7.9m of staff costs were capitalised (i.e. classed as Development Costs) vs $20.1m in 2013.  I suspect that gives a good indication of the R&D cost going forwards.  i.e. nearer $10m vs $17m we saw in 2012.

Other costs

In the second half of the year the CCP cut back on Publishing and Marketing, taking down to 8.9% and 15.3% of revenues respectively (vs 11.4% and 18.1% in the second half of 2013) which perhaps reflects no more Dust514 and World of Darkness.

G&A (General & Admin) costs though went up to $19.8m (=28.8% of sales) - which is odd.  Perhaps some of cost of the work done in relation to paying back the Convertible Bond is in there?

Staff numbers

To put the re-focus of the company into perspective, the number of staff fell from 508 in December 2013 to 339 in December 2014.

In September 2013 CCP employed 553 staff and in December 2010 CCP employed 603 staff which was the start of the ramp up of employees for the Dust514 and World of Darkness development.

Finance Costs

Technical accounting bit here: given the Convertible Bond was repaid early it had to be restated at $20m on the balance sheet vs the $16.7m it was held at before and this difference was put through the Finance Cost on the Income Statement.  Hence, interest costs were about $3m higher than normal.

Balance sheet

There has been a lot of cleaning up: some goodwill has been written to zero; the Development cost on the Balance Sheet has fallen from $72m to $14m (as discussed above); inventories written down to zero.

What that all means is that the Total Equity in the company has gone negative to the tune of $15.3m.

I would expect to see a capital reorganisation in the June 2015 Financial Statements to turn that back positive.


Working out the net debt of CCP is surprisingly hard but i estimate it was $12.4m in 2012, $15.9m in 2013 and $16.0m in 2014.

Cash Flows

It looks like CCP generated a small positive cash flow of $238k in 2014 - not much else to say, things are messy this year.  But if CCP has a lower cost of debt and some other costs come down then we may even get positive cash flows in 2015.

Bond refinancing

I was somewhat surprised to see no mention of the Bond being repaid in April this year.  In my mind this is a key post balance sheet event - even though it occurred after 31 December 2014 there are plenty of indications in the Accounts that it was about to happen and, to me, some sort of explanation would add further clarity.  So, The Accounts don't give any clue as to how the convertible bond was repaid - I.e. With new debt or new shareholders putting in new equity.

However, the Accounts also comes with the complete list of Shareholders attached which I can compare to the main shareholders listed in the September 2013 Prospectus which dealt with the Convertible Bond Placing.


As ever, to get an idea of how much Plex is sitting in hangers we look at the Deferred Income line in the balance sheet.  As a reminder, CCP books Plex sold for US$ as revenues when it is finally converted into game time etc (I.e. used up).  Otherwise, the cash received for the sale of the Plex sits in Deferred Income.

Also potentially sitting in Deferred Income is any Aurum bought from the Store - but I assume that the purchase of Aurum is used immediately.

See my reasoning in this post i wrote back in September 2014 for linking Deferred Income to Plex price movements.

Looking at the "In-game purchases not yet consumed" line indicates that the US$ value of Plex sitting in hangers has risen from $2.1m to $3.0m.  If we assume each Plex costs $15 then that indicates the number of Plex sitting in hangers has risen from 140.5k to 197.7k (using the same methodology in December 2012 there was 71k Plex sitting in hangers).

In some ways this does not add much to the debate on the price of Plex though it does suggest a net 57,200 additional Plex were created in the last year (= Gross creations of Plex less Gross usage of Plex).  In the first 6 months i estimated that about 13,000 additional Plex had been created and therefore this indicates the second half of 2014 saw more investor buying.

Saturday, 23 May 2015

Moving Eve Online Character data to a new computer

So, my graphics card died on me which was a suitable catalyst for a new computer.  I was plesently surprised that by old PC had lasted 5 years and was still able to play my games and meet my requirements - though latterly it was coming to the edge of its abilities.

Anyway, below is what i did to make sure my Eve Character setup was as before.  I.e. quickbar settings, communication channel settings etc.

Quite simply, i just needed to copy the character files from one PC to the other.

The file with the Character data is located at:


where yourname is the name you have given for your data on your PC.

note, the AppData folder is a hidden folder in Windows so you either need to unhide it or do what i did and search for CCP in Windows Explorer.

in this folder you will find:

in the above you see that i have two accounts (core_user) each with 3 characters (core_char).

As far as i can tell, the core_user_12345678.dat files contain the data for your quickbars etc whilst the core_char_11223344.dat files contain the data for your channel tabs etc.

I copied the two core_user_12345678.dat files and the six core_char_11223344.dat files to my new PC.  i.e copy all the files where i have blanked out some data in red.

As far as i can tell, Eve Online on my new computer looks exactly like the old computer in terms of character set up.  Graphics settings though are not included though for me i was resetting to High anyway so i did not mind.

I am not sure what the other 2 .dat files do - they clearly hold some data given on my other PC they were a little bigger, though not much.

Note, this is a very similar process to copying quickbar data from one account to another which i covered in this post.

Sunday, 3 May 2015

Eve Fanfest 2015 - Courier Contracts

In this year's Eve Fanfest a member of Red Frog gave a talk.  Red Frog is one of the Hauling corporations in Eve Online that make their money by hauling contracts made privately to them from A to B.  Personally, i use Push Industries.

It is a 24 minutes presentation and a very good watch:

At 2:20 in he talks about what a Courier Contract is, how it works and how collateral works.

At 5:40 in he talks about what Red Frog is, what they fly and each of the three divisions (2 Hi-Sec, 1 Low-Sec).

At 10:00 in he talks about gankers and the maths of ganking.

At 14:00 in he talks about recruitment and the insurance scheme they have.

At 17:00 in he opens it up for questions from the floor.

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]