Eveconomics

Tritanium Prices going crazy

EVE, ever since it’s inception, has had insurance. And insurance is great, right? You can fly a battleship and almost make ISK off it due to insurance. Insurance IS very important for EVE and it’s economy. Say that EVE didn’t have insurance, what would happen? People would stop flying large ships, like Battleships. And they would fly less, lose less ships and hence stop consumption, ruining EVE’s economy. Consumption is very essential in any economy, meaning that insurance is critical in EVE.

But what we have seen over the last few months is that there has been price deflation in the mineral market, causing ship prices to also go down. That’s good, right? Well, what you’ll find is that the difference between the price of the ship and insurance cost compared to the insurance payout becomes so large, that there’s a profit to be made. What happens then? People buy ships and and self-destructs them.

This causes an increase in demand, increasing price. This means that there is an artificial minimum price of minerals. Furthermore, insurance is an ISK Faucet, which can be argued to be a further cause of price deflation, creating a multiplier effect.

Another “Market-cap” is the current NPC-market mechanics. CCP has artificially capped the price-range of which the price of a NPC-item can move. Say that there was a sudden spike in demand for Capital Ship Blueprints, wouldn’t you expect the price to increase drastically? That’s supply and demand, right? As it stands, the maximum price increase according to a roundtable at Fanfest 2009, is 15%.

For consumables like Nanite Paste and commodities used for POSes, this is a tragedy. It makes NPC-trading limited and it doesn’t make for an immersive feeling of the market. And it doesn’t reflect the behavior of the players very well, which is otherwise what prides itself on having: A totally player-driven market.

Come 2010, I hope that CCP will look into the artificial market-caps there is in place and nerf the hell out of them. However, it has to be done carefully. If they are too heavy-handed, it might decrease the overall level of consumption in EVE, which is going to cause a recession. It would be major economic event, and it will effect the economy considerably in the short-medium run. However it’s a change that has to be addressed soon, preferably in 2010, before Dust and Incarna ships.

I recently made a post on the EVE-Online forum about how I think CCP might be able to learn something from 2 pieces of literature:

• The cluetrain manifesto
• "What would google do?"

I thought that I’d go over the cluetrain manifesto and compile a list of gems that applies very well to CCP.

• 1. Markets are conversations.
• 6. The Internet is enabling conversations among human beings that were simply not possible in the era of mass media.
• 12. There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone.
• 13. What’s happening to markets is also happening among employees. A metaphysical construct called "The Company" is the only thing standing between the two.
• 15. In just a few more years, the current homogenized "voice" of business—the sound of mission statements and brochures—will seem as contrived and artificial as the language of the 18th century French court.
• 18. Companies that don’t realize their markets are now networked person-to-person, getting smarter as a result and deeply joined in conversation are missing their best opportunity.
• 19. Companies can now communicate with their markets directly. If they blow it, it could be their last chance.
• 20. Companies need to realize their markets are often laughing. At them.
• 21. Companies need to lighten up and take themselves less seriously. They need to get a sense of humor.
• 22. Getting a sense of humor does not mean putting some jokes on the corporate web site. Rather, it requires big values, a little humility, straight talk, and a genuine point of view.
• 26. Public Relations does not relate to the public. Companies are deeply afraid of their markets.
• 27. By speaking in language that is distant, uninviting, arrogant, they build walls to keep markets at bay.
• 28. Most marketing programs are based on the fear that the market might see what’s really going on inside the company.
• 34. To speak with a human voice, companies must share the concerns of their communities.
• 35. But first, they must belong to a community.
• 38. Human communities are based on discourse—on human speech about human concerns.
• 39. The community of discourse is the market.
• 40. Companies that do not belong to a community of discourse will die.
• 59. However subliminally at the moment, millions of people now online perceive companies as little more than quaint legal fictions that are actively preventing these conversations from intersecting.
• 60. This is suicidal. Markets want to talk to companies
• 61. Sadly, the part of the company a networked market wants to talk to is usually hidden behind a smokescreen of hucksterism, of language that rings false—and often is.
• 62. Markets do not want to talk to flacks and hucksters. They want to participate in the conversations going on behind the corporate firewall.
• 63. De-cloaking, getting personal: We are those markets. We want to talk to you.
• 64. We want access to your corporate information, to your plans and strategies, your best thinking, your genuine knowledge. We will not settle for the 4-color brochure, for web sites chock-a-block with eye candy but lacking any substance.
• 72. We like this new marketplace much better. In fact, we are creating it.
• 74. You’re invited, but it’s our world. Take your shoes off at the door. If you want to barter with us, get down off that camel!
• 75. We are immune to advertising. Just forget it.
• 76. If you want us to talk to you, tell us something. Make it something interesting for a change.
• 78. You want us to pay? We want you to pay attention.
• 84. We know some people from your company. They’re pretty cool online. Do you have any more like that you’re hiding? Can they come out and play?
• 85. When we have questions we turn to each other for answers. If you didn’t have such a tight rein on "your people" maybe they’d be among the people we’d turn to.
• 86. When we’re not busy being your "target market," many of us are your people. We’d rather be talking to friends online than watching the clock. That would get your name around better than your entire million dollar web site. But you tell us speaking to the market is Marketing’s job.
• 93. We’re both inside companies and outside them. The boundaries that separate our conversations look like the Berlin Wall today, but they’re really just an annoyance. We know they’re coming down. We’re going to work from both sides to take them down.
• 94. To traditional corporations, networked conversations may appear confused, may sound confusing. But we are organizing faster than they are. We have better tools, more new ideas, no rules to slow us down.
• 95. We are waking up and linking to each other. We are watching. But we are not waiting.

So what is the point here? It’s the recent threadnaught and mass-moderation that has been going on. It’s the lack of communication and the tone of that which has been communicated.

CCP is getting to point where it needs to learn that communication makes or breaks it. I have a feeling that the recent rabble on the forum has been extremely damaging to CCP’s reputation. And I’m not trying to say that the world is ending, however I want to make the point that it’s a highly undesirable thing to have happen.

I really do think that every single CCP employee ought to read the cluetrain manifesto, or at least this subset of it. It’s a fundamental part of our new interconnected world. The way of thinking that was present in the early 1990’s is going to get you in trouble nowadays.

How might we fix it? The answer is simple: More live dev-blogs. I can’t emphasize how valuable of a tool this was. Please, for the love of god CCP, bring them back! Let the developers out of the cage and let us talk to them in a live dev blog.

With the recent "problems" that has been facing banks in EVE, it’s apparent that while the general theory is very sound, the implementation has been severely lacking. The major issue arises when discussing things like regulation and oversight. At EBANK, I believe that the biggest problem was accounting and tracking loan details due to the not very tight connection between the bank database and New Eden.

How do we fix this? Here’s what I suggest:
The loan contract needs to be fixed. How? Use the model that the banks of New Eden uses.

Creation of a loan

The contract is created like all other contracts, from the contract window. The contractor(The person lending money) will be the one creating the contract towards the customer. The contract has to be private as well.

1. Here’s the variable that needs to be set:
2. Balance – The total ISK value of the loan
3. Interest rate – Interest rate ought to be specified in % per month
4. Line of credit – Boolean value. Line of credit means that the loan can be repaid in part and the ISK then relent, like a credit-card.

Collateral

The pre-agreed collateral is put into the contract by the contractor. Note: There’s an issue to be had with BPCs vs. BPOs in this sort of contract. There must be made explicit checks to make sure that they aren’t interchangeable.

Collateral modifier: In order to make sure that the collateral doesn’t have to be at a very specific station, the contractor ought to be able to specify if the collateral is allowed to be in non-secure space. Maybe split it into "Allow 0.0" and "Allow low-security space" for increased granularity.

Loan lifetime management

Once the loan has been created, the loan form is sent to the customer. If the person has the collateral as specified in his hangar, then he can accept the loan. The collateral is then made unavailable for all parties

When the loan is accepted, he person effectively has a new wallet, which he can withdraw either 1. The full amount once(Line of credit = false) or 2. A specific amount to his liking (Line of credit = true)

The contractor ought to be able to release specific items in the collateral at any time, to reflect any down-payments on the loan. So say that BOB took out a 30 billion loan on 2 mothership blueprints and has made a 15 billion down payment already, the contractor should be able to release one of the mothership blueprints. Of course, this is optional, but should be an option nonetheless.

Completion of loan

When the very last payment has been made, if the loan is a not a line of credit, the contract will be marked as Completed and all outstanding collateral is returned to the customer.

If it’s a line of credit, the customer will have to mark the contract as Completed, returning the collateral and closing the line of credit.

Loan API

In order to allow for proper accounting, the data needs to be exposed for consumption of outside tools made by the community or the individual organizations.

The loans needs to be exposed through the API with

1. Contractor
2. Customer name
3. Current balance
4. Total balance
5. Total interest accumulated

After that, you need to be able to query following information:

1. Collateral listing
2. Withdrawal/Payment history

Due to the nature of the data, a 12-hour caching is quite acceptable in order to decrease load.

Overall, these few things allows for most scenarios of information that would be needed for tracking of an in-game mechanic. Granted the tools that have been developed by the current generation of banks are slightly more advanced, they contain variables that will be hard to encapsulate and will increase complexity and break immersion.

Conclusion

This is a very simple implementation of a loan system. Is it powerful? Hell yes! It encapsulates an agreement between 2 persons and gives freedom. It’s not fool-proof, but the nature of the very explicit agreement means that it’s a lot less likely to be used for griefing, because of the fact that it’s very close to that of real-life.

The last week has been quite a ride. EBANK announced a 1.2 trillion deficit, and I didn’t take the opportunity to comment on it on this blog? Am I taking shelter from the drama, or?

Nope, not at all! In fact, thanks to Zapatero, I spend a few days working on an article for the upcoming EON. So in the autumn edition of EON, you can read my gigantic feature about “The Descent of Money”.

The article outlines the history of banking in EVE, what went wrong and what the future might have in store for banks in EVE.

So I suggest that you pre-order or pick up a copy of it at the Fanfest store.

Oh, did I mention that EON is currently having a huge sale in order to celebrate its fifth birthday? And did I mention that you can get old magazines at 50% off?

To celebrate EVE’s official magazine as it enters a fifth year, MMM Publishing is putting all back issues on sale. For a limited time only you can get all 15 of the first issues of E-ON for just $7 each – that’s less than half the regular cover price and cheaper than any games magazine on the planet! Not only that, but all subscriber freebies will be included, but only for as long as they remain in stock! The offer ends on 13th September, so get your order in early! All Back issues are still available – you’ll find them in the EVE Store. Quote the code EONM50 when you check out your order to get the discount.

So now’s the time to pick up a few copies of the old magazines. May I suggest #13, which contains my 6-page insiders guide to trading in EVE.

The CSM concept was revived about 14 months ago by now. It has been a bumpy ride, but does it deliver? And if not, how does one fix that? Here’s my take on it:

When CSM1 took first took office, it was dropped into the position with very little help from CCP: We had to make up all our procedures on our own and we had a fair fight, trying to justify our existence and requests for resources from CCP departments(A private forum, email system, a wiki). One might call it a social experiment. And I think it’s quite fair to call it that.

The CSM was tasked to structure itself beyond a simple distribution of roles given by CCP. This has the inherent feature of creating an organic organization. However given the lack of challenges it faces, it’s not going to get "pushed" into a stronger state. It’s like survival of the fittest, without any sort of threats to specie’s existence: The specie will survive but not evolve into the ideal shape.

So before I draw any conclusions based on this, I want to put the CSM into the larger scheme of things when it comes to communication inside a community?

If we look back at my earlier blog posts, I have discussed how a successful way of keeping customers happy is all about communication. Some people did note that I maybe was a bit "harsh". And I think that’s fair to say. However I think that it’s more the case of the ideas and conclusions being put forward were very idealistic and slightly over-drawn in order to make a point.

Once again, I’m going to take basis in the idea that communication("Feedback") is a desirable thing to have. How might one apply this to the CSM?

The CSM is a democratically elected body of players. Already there, there’s the idea of an election where people vote, and players are elected. There’s a feedback loop which is "solid". People can go and check who got the most votes and see some sort of progress based on their interaction. However after that, the CSM sort of becomes a black-box operation.

It’s not that it’s impossible to find out what the CSM is up to. However the time and effort required getting a sense of progress being made by the CSM is extremely high. This means that people are going to lose faith in the CSM very quickly. It means that there’s no incentive to go and take active part in the community around the CSM. It means that the CSM is going to become irrelevant to the masses.

How could the CSM be made relevant? It’s all about having a feedback loop that gives people a sense of control and influence. This creates a sense of communication, which is critical.

Right now, the CSM is stuck to a patched part of the eve-online forum where people can give an issue-thread a thumbs up. And this is hardly desirable due to

1. The fact that only a small part of the community takes part in the forum
2. It’s prone to alt-spamming
3. There’s no way of getting a feedback loop going.

The problem isn’t directly technological, as much as it’s about managing the lifetime of a CSM issue. That means that all the way from when it’s first raised by a member of the community, till it’s taken care of by CCP, it needs to be transparent what the issue is about, what has been done and what is being done about the issue.

Right now, the issue starts out at the forum, is taken into a wiki format and then passed onto CCP. From that, minutes are created and placed on the wiki, separate from the issue.

This is a major problem. And quite frankly, it’s a technological problem more than anything else.

How to fix it:

In essence, things need to be well-integrated. The wiki-system isn’t really a bad system; however it’s currently a half-assed solution that doesn’t do much more than simply providing a way of storing and tracking changes to a document.

Here’s I suggest is done:

A system is created that allows for submission of issues that adheres to standardized templates. It could be a wiki-like system that contains:

1. Voting(Up and down)
2. Discussion
3. Public editing is allowed until the issue is marked as being under discussion by the CSM(Done when the issue is voted on by the CSM). The CSM members could have to accept changes. (Optional)
4. Progress tracking
5. Prioritization by both the CSM and the public on a 2-month basis.

This raises the barrier to entry a bit. However this could be fixed by creating a staged system where an Assembly-hall-like forum is kept in place. This ought to be the place where rough issues are raised and the community is encouraged to create issues in accordance to the template, and then submitted it to the system.

The result of a system like this would be that a portal is created that allows for easy access to all relevant information about the CSM and allows for easy feedback.

Voting

Right now, the public voting aspect is rather much of a farce. As pointed out earlier, it’s kind of a slapped-on thing.

Allowing for voting by both the public and the CSM on a per-account basis creates a metric that can be used in the overall scheme of things when it comes to raising the issue to CCP. I’ll talk about that again.

Discussion

We already have a system that sort-of allows for discussion. However it’s currently not very useful due to the fact you are required to post in the thread to throw a thumbs-up. While having to post could be argued as a barrier to entry for voting for an issue, but there’s not any other requirement for the post, allowing for empty posts making it impossible to discuss anything.

Progress tracking

One of the major things I hear from people when I discuss the CSM with them, is that once the issue has been posted to the forum, it’s hard to find out what happened to it. First of all you have to figure out what meeting it might have been raised in, find the minutes and then find the CSM-CCP meeting minutes.

A very simple system could be put in place to allow for keeping records of all aspects of the lifetime of an issue. That includes the raw meeting logs from the CSM meeting, the voting result and finally the meeting minutes from the CCP-CSM meeting.

All this information ought to be contained inside the issue page itself. One might even suggest that if there are relevant patch-notes, these could be tagged despite CCP’s previous stance on attributing patch-notes with a CSM tag. But if they don’t want to do it, I guess the CSM will have to do it.

Prioritization

One of the crucial aspects of the CSM issue-raising is the prioritization of the issues. Thus far, it has been done by each CSM member at the end of a 2-month cycle, give each issue a value between 1 and N(N being the amount of issues).

One of the main purposes of the CSM, as far as I’m aware, is to get CCP a sense of what is most important to the community. Hence, we ought to extend the prioritization job to also include the public.

Going by the same rules, 1 to N for each issue, players should be able to give their opinion of which of the raised CSM issues are the most important to them.

This gives a better sample of what the community wants. And it’s virtually free in terms of time, as it’s a voluntary thing which people can do.

How does this all fit together?

So now that I have explained what kind of tools ought to be available for the CSM, you are probably wondering how it fits into the grand scheme of things?

As established in earlier posts, communication is extremely important. Right now the CSM’s largest problem is that there’s no sort of feedback loop. It’s a black box where people put up issues and give a thumbs-up, and if they are lucky, the might even know if an issue was raised. After that, the communication stops and issues do not evolve beyond being a document in a wiki system.

By allowing for more “consistent” voting on issues as well as public prioritization, you give people a sense of having influence and control. They can see that their action makes a difference, and that’s crucial.

However as times goes by, having once put in a vote doesn’t make much of a difference. That’s where progress tracking comes into the picture. By making progress information easily accessible, you get another feedback loop(Assuming that there’s actual progress).

This way, the CSM becomes another viable mean of communication between the player-base and CCP.

Conclusion

The CSM suffers from not being pushed to becoming more than it is, and is seemingly not given the much-needed development time in order to give it the tools it needs. In order to the CSM to evolve and not stagnate, progress has to be made and tools have to be provided for pushing the boundaries of what’s possible with a player-elected democracy.

I have been thinking a lot about the how companies like CCP communicate. I have been trying to iterate all the channels of communication that CCP seems to use. However I must admit that off the top of my head, I haven’t been able to list a whole of actual means of communication.

Here’s what I have been able to find:

1. Dev-blogs and other things posted on the information sub-forum
2. Press releases and news-items on the front-page(Often not cross-lined)
3. Live dev-blogs
4. Fanfest
5. Occasional dev(Especially PrismX) posting humorous, yet (occasionally) information forum post

And that’s really it. And even then, there is some flaws with this list:

1. Developer blogs comes in batches every so often, usually around the time of expansions.
2. Press releases and news items are often extremely formal and irrelevant.
3. Live developer blogs are EXTREMELY rare.
4. Fanfest only takes place once a year.
5. Developer sightings on the forum are rare .

What most of these have in common is that their frequency is either predictable or they rarely take place.

To me, the most interesting items are number 3 through 5. First of all, developers postings on the forums are EXTREMELY valuable. God knows that every time a developer posts, god revives a kitten.

Fanfest is an extremely awesome venue and I believe that players and developers alike take a lot with them from fanfest, be it experience, feedback and a sense that CCP is really a very sound bunch of guys. However the major argument against this, would be that only the “elite”/old-school actually attends fanfest(Even if I know that not always to be the case).

Live dev-blogs were a fantastic tool. The barrier to entry is fairly low,  they were posted after they took place, there was two-way communication and it gave people a sense that there was actual people behind the facade(Dare I say marketing?) of CCP. I can’t stress enough how important a medium the live developer blogs are.

In the developer blog section, we have the written kind. These has some benefits compared to the live kind. The fact that they are easily consumable and are accessible to a larger audience. However it often lacks the “personal” touch to it. A technique to make up for this a lot, is for the author to engage in conversation with the readers in the associated thread. However, I find that this is often not the case, and that if it does take place. This gives a very “stiff” touch to it, which I personally find to be sub-optimal.

So what’s the conclusion? Well, with the few paths of communication that CCP has, are irregular in terms of frequency, yet fairly predictable. Some of the more effective means of communication(Live dev-blogs, developers posting on the forum) are slightly more time-intensive. However, the perceived value by the players of EVE is more than enough to warrant it.

Based on this conclusion, I think it’s fair to say that CCP ought to be more active in some sort of communication with their customers. Soon, I’ll be writing finally about how the CSM might be a tool for that.

Heh, once again, I manage to write something completely different than I promised. I have written quite a bit more about CCP’s communication channels. However, last night during my last round of reading the eve-online forums, I found a new thread-naught by current CSM member Vuk Lau(Chairman during CSM2).

The thread was about the customer service department. And to be quite honest, I kind of saw this coming. The CSM has had a fair bit of interaction with the game-master team, and I think the thread is the product of latent anger with the GM team.

Before I go onto the topic at hand, I’m just going to put up a bit of a disclaimer:

1. Vuk Lau is a good guy, so if I disagree with the execution of this issue, it’s purely from an academic point of view
2. I think that the customer-support team has been doing a fair job. However it’s obvious that there’s room for change. The sheer volume of people who have had a bad experience with customer support is a clear sign of that.

And I got to hand it to Vuk Lau. He has at the point of writing this, managed to get some 200 of his friends (and alts) to support the thread.

However, in my mind it raises some questions about the approach and role which the CSM ought to be taking. Reading the thread, I must admit that I found it to be non-professional, slightly unconstructive (Whiny) and void of suggestions for how to change. The post also makes a whole bunch of assumptions about CCP Internal Affairs, which I think is at best speculation.

As far as I’m aware, this is not a desirable thing to have taking place. The CSM ought to be professional enough to conduct a conversation without repeatedly biting the hand which feeds. And I’m afraid that if these sorts of issues are raised to just discuss how much the GM department sucks, that CCP’s trust in the CSM will disappear extremely quickly.

Another problem I’m finding is a lack of continuity. Well, rather the lack of respect for the fact that there has been previous CSMs. A couple of weeks ago CSM3 raised an issue which was dealt with by CSM2. The conclusion on the issue was that it was extremely hard from a programming perspective and that from a game-design perspective, there wasn’t consensus.

Fast forward 6 months, this rejected issue is now being raised again, using the exact same suggestion, despite them being aware that it was already rejected. As far as I’m aware, this is going to be a waste of time during a meeting which is already way too short. And it honestly doesn’t make the CSM seems professional.

I think that the conclusion here is that the CSM needs to consider its steps more carefully. Over the last year, people have put their heart and soul into this thing. By taking a piss on that and acting selfishly and unprofessionally is an insult to the community at large, which relies on the CSM to be a voice of reason between them and CCP.

And that leads me to what I’ll be writing about very soon. I’m currently finishing up a small post which will reflect on CCP’s means of communication, which will lead onto discussing how I see the future of the CSM. So stay tuned for that.