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Dr Mibbles
State War Academy Caldari State
4
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Posted - 2016.02.09 16:38:41 -
[1] - Quote
A common response to Skill Injector price speculation is: The price won't get too high, because people will set up farms of SP producing alts which will stabilize the cost of SP.
This is true, but what is also true is that you cannot farm SP from a character with less than 5.5m skillpoints. So there is only so much 'spare SP' available at any given moment, however demand for such SP is almost without limit. Even if people set up SP farming alts the moment it was confirmed, we're still months away from that source of SP coming online and entering the market.
So, witness the market for injectors today. Lots of people logging in to make a quick profit on unwanted mining SP, etc. Lot's of injectors on the market. A balance between supply and demand.
How long can this last, even in the short term? These market conditions are exceptional and temporary. In the coming weeks and months, before significant additional SP comes through from SP farming alts, we're going to be in a period where demand will almost certainly outstrip supply. What price instant gratification?
I predict that after the first few volatile days of people dumping unwanted SP, we're about to enter an almighty price bubble as supply rapidly contracts while demand remains undiminished.
tl;dr - buy skill injectors today/tomorrow, or wait 3+ months, because we're about to enter a massive price bubble as demand outstrips new supply due to alts requiring 5.5m SP to farm |
Aoi Litvyak
Random inactiva corporation
4
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Posted - 2016.02.09 17:18:40 -
[2] - Quote
What are the cost of them in jita now? I saw the injectors go for 625M as the cheapest before prices were pushed up to 700ish. |
Nef Chi
Pator Tech School Minmatar Republic
3
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Posted - 2016.02.09 17:39:26 -
[3] - Quote
Aoi Litvyak wrote:What are the cost of them in jita now? I saw the injectors go for 625M as the cheapest before prices were pushed up to 700ish.
It has been slowly dropping, 664m currently. |
Droidster
Center for Advanced Studies Gallente Federation
158
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Posted - 2016.02.09 18:36:57 -
[4] - Quote
The market has priced it in already.
Adam Smith is always one step ahead of you.
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Ria Nieyli
40507
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Posted - 2016.02.09 19:15:37 -
[5] - Quote
I think you're overestimating how much demand there's going to be past the initial market boom. Should stabilise around 2/3 of PLEX price, then slowly keeps rising as PLEX does. |
Damjan Fox
Fox Industries and Exploration
230
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Posted - 2016.02.09 19:57:30 -
[6] - Quote
Quote:Even if people set up SP farming alts the moment it was confirmed, we're still months away from that source of SP coming online and entering the market. There are already thousand of Alts over 5.5 mil SP, which can be used for this right now.
Proposal: >>> New Inventory / Item Hangar <<<
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Dr Mibbles
State War Academy Caldari State
4
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Posted - 2016.02.09 20:11:29 -
[7] - Quote
Damjan Fox wrote:Quote:Even if people set up SP farming alts the moment it was confirmed, we're still months away from that source of SP coming online and entering the market. There are already thousand of Alts over 5.5 mil SP, which can be used for this right now.
This is my point.
For 10 years, skillpoints have been building up. Today, people can sell them for the first time.
So there is a flood of supply on the market. However, this can only ever happen once. Next week, supply will not be a flood, it will be a trickle. Demand won't go away. Prices will skyrocket. |
Teckos Pech
The Executives Executive Outcomes
4684
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Posted - 2016.02.10 00:36:13 -
[8] - Quote
Dr Mibbles wrote:A common response to Skill Injector price speculation is: The price won't get too high, because people will set up farms of SP producing alts which will stabilize the cost of SP.
This is true, but what is also true is that you cannot farm SP from a character with less than 5.5m skillpoints. So there is only so much 'spare SP' available at any given moment, however demand for such SP is almost without limit. Even if people set up SP farming alts the moment it was confirmed, we're still months away from that source of SP coming online and entering the market.
So, witness the market for injectors today. Lots of people logging in to make a quick profit on unwanted mining SP, etc. Lot's of injectors on the market. A balance between supply and demand.
How long can this last, even in the short term? These market conditions are exceptional and temporary. In the coming weeks and months, before significant additional SP comes through from SP farming alts, we're going to be in a period where demand will almost certainly outstrip supply. What price instant gratification?
I predict that after the first few volatile days of people dumping unwanted SP, we're about to enter an almighty price bubble as supply rapidly contracts while demand remains undiminished.
tl;dr - buy skill injectors today/tomorrow, or wait 3+ months, because we're about to enter a massive price bubble as demand outstrips new supply due to alts requiring 5.5m SP to farm
Why is demand without limit?
Is the demand for Ferrari's without limit? How about private jets? What about a house in Pebble Beach? Why is demand not without limit? Oh yeah...prices. Prices influence both demand and supply.
Could there be a price bubble? Maybe, but I'm a bit skeptical, but here is how it would work. If the initial price is too low, then what could happen is people buy them up put the price on an upward trend. People note this trend and jump on the band wagon. Soon you have a self-sustaining trend....until it isn't and the price collapses.
Upgrading Local to Eliminate All AFK Influence
So Local Chat vanished, now what?
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Sabriz Adoudel
Move along there is nothing here
5674
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Posted - 2016.02.10 01:15:02 -
[9] - Quote
Demand will decline somewhat.
EVE has a fair number of trillionaires. Some percentage of these people are undoubtedly looking to 'perfect' their main character and willing to spend 20b, 100b or even a quarter trillion to do so.
This is a once-off demand spike too.
I support the New Order and CODE. alliance. www.minerbumping.com
Sabriz's Rule: "Any time someone argues for a game change claiming it is a quality of life change, the change is actually a game balance change".
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Jerry T Pepridge
Meta Game Analysis and Investment INC.
699
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Posted - 2016.02.10 01:45:55 -
[10] - Quote
Sabriz Adoudel wrote:Demand will decline somewhat.
EVE has a fair number of trillionaires. Some percentage of these people are undoubtedly looking to 'perfect' their main character and willing to spend 20b, 100b or even a quarter trillion to do so.
This is a once-off demand spike too.
we didnt get rich throwing money down the toilet for useless SP
@JerryTPepridge
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Vibiana
Frontier Trading Company
41
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Posted - 2016.02.10 04:49:57 -
[11] - Quote
Jerry T Pepridge wrote:Sabriz Adoudel wrote:Demand will decline somewhat.
EVE has a fair number of trillionaires. Some percentage of these people are undoubtedly looking to 'perfect' their main character and willing to spend 20b, 100b or even a quarter trillion to do so.
This is a once-off demand spike too.
we didnt get rich throwing money down the toilet for useless SP
Whould you pledge 20b of yours on that? |
Teckos Pech
The Executives Executive Outcomes
4684
|
Posted - 2016.02.10 05:20:42 -
[12] - Quote
Sabriz Adoudel wrote:Demand will decline somewhat.
EVE has a fair number of trillionaires. Some percentage of these people are undoubtedly looking to 'perfect' their main character and willing to spend 20b, 100b or even a quarter trillion to do so.
This is a once-off demand spike too.
Why?
Upgrading Local to Eliminate All AFK Influence
So Local Chat vanished, now what?
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Teckos Pech
The Executives Executive Outcomes
4684
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Posted - 2016.02.10 05:21:36 -
[13] - Quote
Vibiana wrote:Jerry T Pepridge wrote:Sabriz Adoudel wrote:Demand will decline somewhat.
EVE has a fair number of trillionaires. Some percentage of these people are undoubtedly looking to 'perfect' their main character and willing to spend 20b, 100b or even a quarter trillion to do so.
This is a once-off demand spike too.
we didnt get rich throwing money down the toilet for useless SP Whould you pledge 20b of yours on that?
Yeah, because getting a perfect character is going to do....what?
Upgrading Local to Eliminate All AFK Influence
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Gilbaron
Free-Space-Ranger Northern Coalition.
1898
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Posted - 2016.02.10 06:46:39 -
[14] - Quote
i really wonder how the prices would look like right now had ccp not intervened massively in the plex market yesterday.
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Teckos Pech
The Executives Executive Outcomes
4686
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Posted - 2016.02.10 07:37:13 -
[15] - Quote
Gilbaron wrote:i really wonder how the prices would look like right now had ccp not intervened massively in the plex market yesterday.
Based on what?
Upgrading Local to Eliminate All AFK Influence
So Local Chat vanished, now what?
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Dr Mibbles
State War Academy Caldari State
4
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Posted - 2016.02.10 07:49:31 -
[16] - Quote
Teckos Pech wrote:
Why is demand without limit?
Is the demand for Ferrari's without limit? How about private jets? What about a house in Pebble Beach? Why is demand not without limit? Oh yeah...prices. Prices influence both demand and supply.
Could there be a price bubble? Maybe, but I'm a bit skeptical, but here is how it would work. If the initial price is too low, then what could happen is people buy them up put the price on an upward trend. People note this trend and jump on the band wagon. Soon you have a self-sustaining trend....until it isn't and the price collapses.
It's a lot easier to make ISK in EVE if you are motivated to do so than in real life, so the ferrari comparison doesn't work. Grinding a wormhole for half a day to earn an extra few billion is well within the capacity of most players.
But I do take your point.
For me, it's like this:
Day 01: Demand Level: 100 // Supply Level: 100 Day 07: Demand Level: 90 // Supply Level: 70 Day 14: Demand Level: 80 // Supply Level: 50 Day 28: Demand Level: 75 // Supply Level: 30 Day 56: Demand Level: 70 // Supply Level: 20
After this period I expect skill farming alts to start extracting in sufficient numbers to meet the demand.
My feeling is that this temporary imbalance between supply and demand has the potential to generate a huge bubble, because no matter how high prices get, you cannot extract SP that isn't there to meet the demand. People become emotionally attached to their characters and won't extract SP they don't want to. This market is not going to be driven by rational market players, but by impatience and emotion. Just like Dutch tulips all that time ago. |
Ria Nieyli
40548
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Posted - 2016.02.10 08:10:27 -
[17] - Quote
Dr Mibbles wrote:Teckos Pech wrote:
Why is demand without limit?
Is the demand for Ferrari's without limit? How about private jets? What about a house in Pebble Beach? Why is demand not without limit? Oh yeah...prices. Prices influence both demand and supply.
Could there be a price bubble? Maybe, but I'm a bit skeptical, but here is how it would work. If the initial price is too low, then what could happen is people buy them up put the price on an upward trend. People note this trend and jump on the band wagon. Soon you have a self-sustaining trend....until it isn't and the price collapses.
It's a lot easier to make ISK in EVE if you are motivated to do so than in real life, so the ferrari comparison doesn't work. Grinding a wormhole for half a day to earn an extra few billion is well within the capacity of most players. But I do take your point. For me, it's like this: Day 01: Demand Level: 100 // Supply Level: 100 Day 07: Demand Level: 90 // Supply Level: 70 Day 14: Demand Level: 80 // Supply Level: 50 Day 28: Demand Level: 75 // Supply Level: 30 Day 56: Demand Level: 70 // Supply Level: 20 After this period I expect skill farming alts to start extracting in sufficient numbers to meet the demand. My feeling is that this temporary imbalance between supply and demand has the potential to generate a huge bubble, because no matter how high prices get, you cannot extract SP that isn't there to meet the demand. People become emotionally attached to their characters and won't extract SP they don't want to. This market is not going to be driven by rational market players, but by impatience and emotion. Just like Dutch tulips all that time ago.
Except that demand will be frontloaded. As characters age, there's less pressure to buy skill points. The people that want sp right here and right now are already buying. It will taper off. Meanwhile, entrepreneurs will be gutting cheap characters from the bazaar and flooding the market with cheap injectors stabilising the supply. |
Gilbaron
Free-Space-Ranger Northern Coalition.
1898
|
Posted - 2016.02.10 08:18:21 -
[18] - Quote
Teckos Pech wrote:Gilbaron wrote:i really wonder how the prices would look like right now had ccp not intervened massively in the plex market yesterday.
Based on what?
there were 11k plex traded yesterday in late EU. that's 3.5 times the normal amount. there must have been something going on. |
Ria Nieyli
40548
|
Posted - 2016.02.10 08:21:43 -
[19] - Quote
Gilbaron wrote:Teckos Pech wrote:Gilbaron wrote:i really wonder how the prices would look like right now had ccp not intervened massively in the plex market yesterday.
Based on what? there were 11k plex traded yesterday in late EU. that's 3.5 times the normal amount. there must have been something going on.
People dumping PLEX on the market to be able to afford injectors. |
Ruvin
Out of Sight.
201
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Posted - 2016.02.10 10:29:48 -
[20] - Quote
the supply is WAAAAAAY above the demand. i expect month's of underpriced SP, before it runs out and even's out with farms, which people have ready long before this was introduced
Opportunities multiply as they are seized.
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Ria Nieyli
40552
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Posted - 2016.02.10 10:55:38 -
[21] - Quote
Ruvin wrote:the supply is WAAAAAAY above the demand. i expect month's of underpriced SP, before it runs out and even's out with farms, which people have ready long before this was introduced
It was officially announced on 15-10-2015, so even the people that started setting up then would be ready by now. |
Ruvin
Out of Sight.
201
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Posted - 2016.02.10 11:04:58 -
[22] - Quote
but also many have billions of SP, in old alts, old accounts. Characters bought from the bazzaar. The amount of SP at this moment is HUGE. But the demand not so much.
Many wanted those illusive comand ships. Or maybe that long marauder skill. But once you get those sought by skills. It's not convenient diminushing returns are quite bad. So the injectors will be used ocassionaly, by new players, or maybe for alts and so on. And i expect it only will scratch the surface of the pool.
As for farms, many have alts training already with perfect 2700 SP, with perfect 1year plans. But they arent profitable yet, and i think the margin will be very slim on those.
Opportunities multiply as they are seized.
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Dr Mibbles
State War Academy Caldari State
4
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Posted - 2016.02.10 11:08:09 -
[23] - Quote
Something that seems to be being missed is that active, logged in players will want skills. Those who don't want them tend to either be market speculators or those who simply don't play.
The demand is driven by active players, not forum warriors, or inactive characters with loads of SP that literally will not even log in because they are unsubbed and lost interest in the game. You're underestimating I believe the demand from those who are impatient. Time will show us who is right on this. |
Ruvin
Out of Sight.
201
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Posted - 2016.02.10 11:14:30 -
[24] - Quote
All want skills, but its more efficient to train them in time with plex. Injectors due to COST and HUGE diminushing returns, are very bad cost/effect ratio.
It was a great big deal yesterday, it can only settle down. People spent billions and billions yesterday because it was new, it was a great way to get social skills etc. But its not affordable keep the demand high.
How much SP you bought yesterday ? How much today ? How much will you buy in a week ?
Opportunities multiply as they are seized.
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Dr Mibbles
State War Academy Caldari State
4
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Posted - 2016.02.10 11:24:02 -
[25] - Quote
Ruvin wrote:All want skills, but its more efficient to train them in time with plex. Injectors due to COST and HUGE diminushing returns, are very bad cost/effect ratio.
That's a rational response but players are impatient, driven by emotion and not rational. This is what drives all price bubbles in history - they are not rational and cannot be argued against rationally. |
Ria Nieyli
40555
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Posted - 2016.02.10 11:29:32 -
[26] - Quote
Ruvin wrote:but also many have billions of SP, in old alts, old accounts. Characters bought from the bazzaar. The amount of SP at this moment is HUGE. But the demand not so much.
Many wanted those illusive comand ships. Or maybe that long marauder skill. But once you get those sought by skills. It's not convenient diminushing returns are quite bad. So the injectors will be used ocassionaly, by new players, or maybe for alts and so on. And i expect it only will scratch the surface of the pool.
As for farms, many have alts training already with perfect 2700 SP, with perfect 1year plans. But they arent profitable yet, and i think the margin will be very slim on those.
Well, it depends on what you deem profitable. Five percent per month? Ten?
But yeah, I can see the margins being razor thin now that I thought about it.
Dr Mibbles wrote:Something that seems to be being missed is that active, logged in players will want skills. Those who don't want them tend to either be market speculators or those who simply don't play.
The demand is driven by active players, not forum warriors, or inactive characters with loads of SP that literally will not even log in because they are unsubbed and lost interest in the game. You're underestimating I believe the demand from those who are impatient. Time will show us who is right on this.
And most of the people that wanted those new skills already got them. There was a huge consumer rush at the introduction of it, but most people are satisfied now and further purchases would be sporadic. The thing is that as a character ages, it naturally accumulates skill points, and coupled with diminishing returns, at some point people don't really feel like buying any more. |
Funky Koval
Bad Artists
16
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Posted - 2016.02.10 13:22:20 -
[27] - Quote
My thoughts. Not an experienced trader nor economist of any sort, so feel free tear me a new one if I missed sth obvious :D, but I have to side with Dr Mibbles on this.
I also think a lot of you forget that many of you don't represent a typical "average" EVE player or the way they approach the game. And those players are the ones driving the economy in the long term.
On the supply side:
Character farms. Well, at a first glance - how do you even make those profitable, when you cannot extract below 5mil points and you have to plex these accounts (2 months of which are pretty much wasted, it's gonna be hard to sell a 5 mill sp char proftably).
I realize it depends on the price of injectors and I am myself arguing that these are going to be high, but it's a catch-22 of sorts, and a long-term gamble. So I believe that despite all the talk, very small percentage of people will do it, although a few may try to make this a big scale operation. They may make a profit, but In the end though, I don't see this as a huge source of supply.
So while there's a lot of spare SPs at the moment, I agree with OP - that supply will quickly diminish.
And the injector mechanics wastes a hefty percentage of SPs anyway, so regular players will be really careful about what they extract. The majority of SP extraction has probably already occurred (or may happen withing a week or so).
On the demand side:
The 'boom' based on the wish to respec older characters is temporary, that's clear.
But people will always be making alts and trying new things - and now it's become a lot easier to do so.
Obviously, all the new players who stick with the game will be looking at making an alt or two at some point.
But not just that, making that PvP/FW alt, or POS gunner alt, or whatever it is you always wanted to try - has now been moved form the realm of long-term planning to being able to so it immediately. At a cost of a few billion isk, yes, but that is not prohibitively expensive for a reasonably efficient PvE player - which EvE has tons of (it seems to be by far the most prevalent character 'archetype' in EVE, afaik).
FWIW, I have an 11 year old character, and I just made a new alt...
So here goes.
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Teckos Pech
The Executives Executive Outcomes
4689
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Posted - 2016.02.10 15:51:21 -
[28] - Quote
Dr Mibbles wrote:A common response to Skill Injector price speculation is: The price won't get too high, because people will set up farms of SP producing alts which will stabilize the cost of SP.
This is true, but what is also true is that you cannot farm SP from a character with less than 5.5m skillpoints. So there is only so much 'spare SP' available at any given moment, however demand for such SP is almost without limit. Even if people set up SP farming alts the moment it was confirmed, we're still months away from that source of SP coming online and entering the market.
So, witness the market for injectors today. Lots of people logging in to make a quick profit on unwanted mining SP, etc. Lot's of injectors on the market. A balance between supply and demand.
How long can this last, even in the short term? These market conditions are exceptional and temporary. In the coming weeks and months, before significant additional SP comes through from SP farming alts, we're going to be in a period where demand will almost certainly outstrip supply. What price instant gratification?
I predict that after the first few volatile days of people dumping unwanted SP, we're about to enter an almighty price bubble as supply rapidly contracts while demand remains undiminished.
tl;dr - buy skill injectors today/tomorrow, or wait 3+ months, because we're about to enter a massive price bubble as demand outstrips new supply due to alts requiring 5.5m SP to farm
The market right now is new and will likely have a fair amount of volatility what you are talking about, IMO, is the long run vs. short run to a large degree.
Long run we might see SP farms and I would imagine, given the link between SP, AURUM and PLEX for the price of SP injectors to track PLEX prices. I doubt an SP farming account will make much ISK above the cost of a PLEX, but you can cover the sub and still use that account, given it has other skills for making ISK (PI, invention, trading, etc.) to make additional ISK.
As for a balance between supply and demand...well the short answer is it will always be balanced to a large extent via the price. Right now if lots of people are sucking out what they perceive as useless SP and dumping it on the market there is plenty of supply, so prices are low. When that initial "gold rush" is over the price may very well go up....but again it will likely move to a new equilibrium.
Supply contracting is NOT a price bubble. A price bubble is when the price of an asset becomes "unhinged" or "disconnected" from its "intrinsic" price. You yourself did some decent work on the "intrinsic" price as well in another thread. I believer your final estimate is that the price would be around 750 million ISK for an injector.
Further, if the price spikes due to a drop off in supply and we are still waiting for SP farms to start supplying the market that high price is an information signal. In fact, all prices are sources of information. A high price is sending the signal that the market supply is low and for people to "make" more of it. An extreme example that we often hear about is water after a catastrophe such as a hurricane or the like where water is like $5 for a small 12 oz bottle. What that price is saying (screaming really) is "Hi, more water here please...NOW!!!" Another example is in California which has a unique gasoline blend and a gas refinery goes offline. Because supply has had a sudden and unexpected negative shock the gasoline already in the tanks in the ground at gas stations is more valuable immediately. So the price goes up...which is sending a signal to consumers to conserve as there is not as much as was previously thought. The market working as intended.
Now, we could see a bubble due to a price increase. There has been some interesting work in mathematical models of speculative bubbles and they way they work is that there is an asset that is put on the market well below it's intrinsic value. People see this low price and buy it sending the price higher. The upward price movement induces more people to buy the asset as they see the upward price movement as a signal that the price will keep going up. So there is an almost self sustainintg upward trend in the price of the asset well beyond its intrinsic value and then...it all stops (usually because the asset has a limited life span) and the price crashes. However, the current prices while a bit low are not that low. Also note, in these examples (these are both mathematical models and experimental models) it would be hard to "spot" the bubble until after that fact or until you well into the bubble. The assets in question have a pre-defined value in the experiments. Then for some reason a player will put an asset up for sale at a price below the pre-defined value. So the initial price increases look sensible as the price moves back to the pre-defined value. The problem arises when the price goes past that predefined value. And in real life there is no pre-defined value...so bubbles are very hard to spot ahead of time, but very easy to spot after the fact and interestingly lots of people claim to have known it all along.
As for skill extractors they have already seemed to have settled near the price you estimated in that other thread I noted. I don't think we'll see much action there. We might see some in the injector market though.
Sorry for the long rambling post.
Upgrading Local to Eliminate All AFK Influence
So Local Chat vanished, now what?
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Teckos Pech
The Executives Executive Outcomes
4689
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Posted - 2016.02.10 15:58:02 -
[29] - Quote
Funky Koval wrote:
Character farms. Well, at a first glance - how do you even make those profitable, when you cannot extract below 5mil points and you have to plex these accounts (2 months of which are pretty much wasted, it's gonna be hard to sell a 5 mill sp char proftably).
Well it depends. Alot of players who are older and have alts that are trained up because we have multiple accounts and we have been training these alts becasue...well we want the account active can set up farms on alts that are good at also doing things in game.
For example, an alt might be good at invention. So you set him up training a long skill, one with a high rank. In a month you start harvesting, and also doing invention. So you sell the SP which by most accounts should come close to covering the cost of PLEX. You can also do invention on the same character and make additional ISK.
Is this profitable?
Well I can stop paying CCP cash out of my pocket...which means I can spend it on something else in RL: a win.
I get to keep the account active (cyno alts, ratting, invention, etc.) so I can make additional ISK: a win.
So it looks good to me. Yes, I have a number of alts where I could do this, and I'll look into it once the market settles down a bit. Given the link between PLEX, AURUM and SP now...the cost of SP injectors, in the long run, will likely move with PLEX prices.
Upgrading Local to Eliminate All AFK Influence
So Local Chat vanished, now what?
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Aptenodytes
Reckless Abandon
196
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Posted - 2016.02.10 16:09:52 -
[30] - Quote
Funky Koval wrote:So I believe that despite all the talk, very small percentage of people will do it, although a few may try to make this a big scale operation. Agreed, it's the same for character farming. It always was profitable if you know what you're doing, and will remain so after this change, yet very few people actually do it. Those that do, do it on multiple accounts because if it's profitable on one account, it's 10 times as profitable on 10 accounts (as long as you don't saturate the market).
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