PLEX Reverse sale and the winds of change

We start today with the PLEX price over the last one year. People made a lot of money riding this gravy train. Toot toot.

I showed the downward pressure CCP sales were having on the PLEX price. I have no idea if they were trying to keep that price resistance (green line) ~3.2m ISK per PLEX price. Some comments have been made that they wanted to increase revenues and volume of cash purchases in order "pimp" their books. By have more money running through the register for the sale to Pearl Abyss. Again possible but I have no idea. What I do have a strong conviction about is the sales depressed the price of PLEX for 6-12 months. Like holding a ball underwater once you release the downward pressure it reaches for the sky.

Let's look a little shorter time frame on the chart below is the last 120 days. Can you see the big spike? That was a sale of a different kind. CCP changed tack. Instead of using a direct purchase dollar /sterling/euro sale. The sale was ingame. The Omega gametime price was changed. Normal price 500 PLEX for a super duper special price of 425 PLEX.

Now instead of artificially creating a resistance to price. By people swapping real currency for PLEX and then dumping the PLEX on the market. They created a higher demand for PLEX forcing the price up. The time period, I think, was a week possibly shorter over a weekend? So we see a spike higher in price to satisfy the demand. Then a sharp decline as demand returned to normal. Over the next 2-3 week period price corrected down to below 4m ISK. Then what? BTFD (Buy The Farking Dip). A lot of people made a lot of ISK from SP farming. Actually my post on inflation showed people made a lot of ISK from everything. The dip in price allowed a lower entry point for speculators to buy PLEX knowing that in four weeks everyone needs to PLEX again.

This was a previous chart showing profitability of SP farming. Whether a full account farm or farming two alts to PLEX a main character on one account. Monies were flying around like a rap video shoot in the green box. In the red box? Yeah not so much.

The gravy train on extracting has gone "for now". So "where da money at?". The markets for the raw materials and the outputs.  It will be interesting to see over the coming months but CCP could have set a clock in motion. Speculators now have a window when they know accounts need to be plexed. They already have a good idea anyway because they own all the stations in Perimeter where almost all the PLEX etc is bought and sold.

PLEX Inflation and the invisible hand

I showed that PLEX sales all through 2018 depressed the price of PLEX. This caused the "average player" to feed the market with injectors until a breaking point. I think that point was around Oct-Nov last year. There had been enough negative months that it just wasn't worth using PLEX MPTC to extract alts. The market lost it's indiscriminate seller. "everyone says extract your alts to pay for your main" changed to "this shit don't work no more".

This chart shows the "Delta" i.e. what you make once you buy one extractor. Extract the SP and sell one injector. We had two forces working in this chart. The green line shows resistance line for PLEX. These sharps drops in price were caused by CCP sales. People were incentivised to buy PLEX for $$$ and sell it on the market, or use it for cheap game time. The pink arrow shows the indiscriminate seller. The "average player" detailed above. No matter the price they would sell directly on the market to "fund" their account. Until it didn't.

A question I had yesterday regards the "lag" in prices i.e. offsetting the price by 10/30 days to show a correlation. At the minute I haven't had to do it. IRL take the US Tax cuts of 2017. The market impact took 6-12 months to shaow in data. Company X buys a crane it takes time to order. Build to the spec, test deliver. Then you might have 90day terms for paying your invoices. It all takes time. In space I can sell PLEX buy twenty freighters realise I only need ten. Sell ten and buy three Machariels instead and put some ISK back in PLEX. As quick as I can do the clicking.

Look at the spike in PLEX price red line in Apr. Look at the immediate drop in profitability Delta blue line. The impact was immediate.

All the data I have comes direct from the Eve client. I don't know the computers API ESI I once had an STI! Shout out to Ethan02. He has done an amazing job pulling data from the MER reports that come out each month. If you haven't already check out his site https://www.adam4eve.eu/

Shows the increase in ISK. e.g. Inflation

The price of PLEX corrected for the split in may '17

Anyone that has studied statistics, data analysis or dare I say economics knows:

Correlation ≠ Causation

You always have to look deeper. Just because prices trend in the same direction does not mean one is causing the other. I will let one thing slip from my real life.

I like Bitcoin too but Gold just makes me horny. Governments will always take the easy route and that means, over time, the destruction of the currency through inflation.

I see PLEX as space gold. The last time I took a break from Eve lasted almost 2 years. I put all my ISK in PLEX and came back to a nice surprise. Ships changed, Triglavians were a thing but PLEX was the same. It had risen inline with the amount of ISK ingame as shown by the first two charts. So it didn't matter that a freighter had doubled in price, because my PLEX had also doubled in price. Now if I had kept all my ISK in ISK (?) then that freighter would have been a larger % of my capital to purchase.

PLEX Volatility and the changing face.

Yesterday we looked at the "Average player" earning some ISK on the side by extracting SP and selling injectors. I showed that as we progressed through 2018 you could PLEX a main character by extracting the other two slots for near zero cost. This changed in September.

Yesterday we started with this chart.

Showing the peaks and troughs in PLEX pricing and how it affects profitability in the various ways to extract skill points.

Today the same chart but we are going to look at volatility.

"In finance, volatility (symbol σ) is the degree of variation of a trading price 

series over time as measured by the standard deviation of logarithmic returns."

In simple terms if the price moves a lot it has high volatility. If you think in stock market terms it doesn't just mean "ah sell, sell, sell the market is crashing down". Something can have high volatility if it moves up as well. It is how fast it moves up or down or how far from the past price.

In the green box we can see that the variation is high. In the space of six months the full account (yellow) went from +2b -> 0b -> +1.8b of profits. This was a full account using all slots to extract skill points "SP farming".

This period was full of PLEX sales. The system as explained yesterday was at the whim of the "average player". Not super tight on margins. Using specific buy and sell orders to get the maximum profits. But during this time you also had players with huge SP farms.

How I made my first trillion ISK

Posts like these were cropping up all through 2017/2018. I think this is what made the moves so large. The plex sales would take place and the huge farms would need to move sell or extract a lot! Yes they would use sell and buy orders to maximise margins (unlike "average player") but the initial purchase could only be done in the window of the PLEX sale. This led to higher highs and lower lows. Volatility.

That all ended when we had this, as shown yesterday.

The "average player" could no longer PLEX their main character by extracting SP from the other two slots. You can see that we had another bump up in profitability in December. PLEX sales again over Christmas. Which lead to CCP Hilmar saying:

"We overdid it last year when it came to PLEX promotions. 

We are going to slow the ■■■■ down for now."

-- CCP CEO Hilmar Veigar Pétursson, 28 March 2019

That was preceded by volatility of another kind. Kinetic volatility.

14th October TEST anchor keepstar in Perimeter

TEST goes for Horde's ISK fountain.

This was the start of shenanigans failed Keepstar anchoring shooting pew pew pew. During all of this markets were put up shot taken down. Chaos. Markets don't like chaos. During this time existing PLEX, extractor, injector and MPTC sell/buy orders would have been taken down. Some gone into asset safety etc as the fighting ensued.

Once that was all done and dusted? Tranquility. We have the red box

As was shown yesterday profits from SP farming were near zero. Profits remain however in charging a small % fee for the huge amount of inputs and again a small % fee for selling the outputs of SP farming.

With profitability of the main activity so low all these components are just being sold between each other. Which leads to speculation.

PLEX, SP farming and many charts...

PLEX is always in discussion. Almost always “too expensive CCP do sumfing, me no can play”. I won’t be discussing the price as in whether I think it is to high but simply the data in front of us.

Below is a chart showing “Average” profitability from skill extraction. By average I mean average prices of plex, extractor, injector and MPTC. Dedicated skill farms would use specific buy and sell orders to maximise margins. This data/chart is for the average Joe making some money on the side.

• Profitability Plex (Blue): is one character maximum training paid via plex (500plex).
• Profitability MPTC (Red): is as above but for second character on account so using MPTC.
• Full Account (Yellow): Is full dedicated SP account so one character on plex and two on MPTC.

So in this chart I have marked in green periods of peak profitability with Green circles. Negative profitability with Red circles.

You can see that these peaks coincide with sharp drops in PLEX price. 2018 was a great year for PLEX sales. This makes sense as PLEX is the largest input to the SP farm process.

“you stupid what about extractors and MPTC!”

Yes OK you also need extractors and MPTC as input costs. Both of these can be gained via the NEX store by swapping for PLEX. The timing of when to profit from this is another subject for another post maybe.

So PLEX price drives everything.

Again this is all showing the “Average prices” the “average player” how many were keeping track of all these prices? This forum in the past was full of economic discussion on all the moving parts of Eve’s economy. I think this does still go on but more likely takes place on Alliance forums.

We had a glut of injectors we were swimming in the things for a while.

Prices were driven slowly lower due to oversupply. That is because the “average player” didn’t notice this on the next chart.

Profitability was driven over time to zero. Remember this yellow line shows profitability from extracting and selling SP from all three characters on an account. Sticking with the “average player”. What if you were using the spare two slots on an account with one main character?

1 main 2 sp (Green): Shows exactly the above example. One main character and two extracting.

You can see that the Green line is close to zero until the start of September. This means that extracting two characters would pay to PLEX your main character.

This is important. From this point profitability slowly drove lower.

This period marked in red was a shock. “Average player” at this point when he was happily extracting his second and third characters was -1.5billion isk down once finished. Poop!

Going from minimal cost and occasionally being in profit, to losing 1-1.5b a month!

And wouldn’t you know this “shock” month showed us the bottom in injector prices.

Going from oversupply to undersupply. The negative shock stopped people extracting on second/third character slots.

There is more to come but I need to do some work which actually puts pennies in the bank.

I only have about 400days of data, back to Feb '18 so if anyone could share any extra data? Looking at some of the guys that host eve data online i.e. evemarketer or evemogul etc.

Should I...

....grab the dice and reroll again?

One year!

Five Hundred and Sixty Nine Kills
Three Hundred and Sixty Four Solo Kills
Two Hundred and Forty One Losses
Twenty Four Billion ISK Destroyed
Four Billion Nine Hundred Million ISK Lost
Seventeen Million Four Hundred Thousand Skillpoints
Negative Nine point Zero Four Security Status

Fin

EVE Lore Fetish!

With all the interaction with the EVE universe based around its players, I tend to forget that there is quite a rich back story to things in EVE. With the last few updates building on the Jovian/Sleeper storyline, I have been hooked reading anything that Rhavas writes on Twitter or over at his Blog Interstellar Privateer. That's a link to the first of three posts talking about what might be the meaning behind Caroline's Star. Reading all this stuff got me really interested and led me to purchase Templar One, the third Eve book by Tony Gonzales, which tells the story of how sleeper technology was used to make DUST:514 mercenaries possible. It also bring a lot of the story around which the recent events in Eve are tied to.

I have been been making my way through all the EVE Chronicles and came across this Chronicle Collection by Tomiko Kawase. Every official chronicle in one place. It could be a little easier to navigate, indexing would awesome, but it has been nice to be able to read through when I get the chance and not have to rely on an Internet connection.