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Iridescent Moon
Caldari
Iridescent Dawn
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Posted - 2009.08.12 19:40:00 -
[31]
Ah, your forgetting something here people...
One day Eve-Online will close.
If there is a stockpile of PLEX in game, lets say 20,000 of them, those PLEX go poof when the server closes.
The person why purchased the PLEX with RL monies is long gone. All that is left is a person with an account holding a virtual good in an online game. That virtual good is owned by CCP. It represents 30 days game time... for a game that closed.
Stockpiles of PLEX in this scenario benefit CCP because they would represent 340,000 in subscription sales they did not have to service. You essentially get the effect of the lost/unused gift certificates. Your talking about free money here for CCP.
The PLEX holder at the close of the game has no recourse, they hold a ticket for a game that no longer exists. In the past with games like Tabula Rasa they refunded game time that went past the official closing date of the game. PLEX would not fall under this category because, PLEX are not RL money.
The end result is that on the long term CCP wins in just about every case. Potentially someday you could have the whole player base using PLEX to pay for their accounts and have no active paying subscribers. Even if that does happen the severs can close and CCP is free from the obligation.
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Battlia
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Posted - 2009.08.12 22:21:00 -
[32]
 Originally by: Joseph Dredd
Edited by: Joseph Dredd on 12/08/2009 08:23:03
All this talk about people paying up front or not and the way it affects CCP's profits is all well and good but nothing would come close to affecting their profits as much as if everyone who has an account logs on and stays on 23/7.
The bandwith cost would increase 10 fold at least.
If you take my situation which is probably the same for most people.
I pay for 23 hours every day of game play but am only using the bandwith from ccp for say 3 hours per night maybe a touch more at the weekend.
Now imagine what would happen to your sub costs if we all did log on for 23/7 every day. I doubt very much CCP factored in the possibility of everyone logging in all day
The best customer CCP has is the person who has an account and logs on once every few days just to change skills
Did you ever monitor the bandwidth used by EVE? It is pretty negligble. Even if everyone goes to Jita and gets send the spam from local it wouldn't amount to anything.
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HighPowerChar
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Posted - 2009.08.13 02:43:00 -
[33]
Originally by: Iridescent Moon
One day Eve-Online will close.
What? Lies, LIES I say!  |
Steve Thomas
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Posted - 2009.08.13 04:22:00 -
[34]
Originally by: SencneS
One thing is for sure, we're not going to get any GM/Dev/CCP tags in this thread commenting on why they really bloged this 
I doubt they will, they know how toutchy the subject of useing RM to pay for an advantage is with me.
Especialy when one of them screwed up and pointed to Evony as an example of a micro transaction game(honest to god how a game that expects its players to pay > 30 USD a week can be called a micro transaction game is beyond me,(when it launched the minimum you could put in was $30 USD, they then changed it when people piched a fit, but they tossed in $50 worth of bonus items if you spend at least 30 USD a week, and have since added in a "spusdo subscription" option at 200 USD every 15 weeks that pays out more each week untill week 15. . so you need overlaping subscrptions just to keep your economy from boom-busting on you in the middle of a ongoing war)
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Stop freaking worrying about why things the developerd did 5 years and more ago no longer make sence. |
nether void
Caldari
Caldari Provisions
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Posted - 2009.08.13 04:29:00 -
[35]
One thing to always remember is getting the cash now is always better than forecasting it into the future. If you get cash now, you can invest that cash and make even more cash with it. It's not as lucrative to borrow on forecasted earnings, and then invest with that cash. You have to pay a premium when you borrow from others. When you borrow from your own future earnings (PLEX sales), you essentially have just borrowed at 0% interest. It's a lot easier to make money on 0% interest loans, obviously.
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Steve Thomas
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Posted - 2009.08.13 04:29:00 -
[36]
Edited by: Steve Thomas on 13/08/2009 04:32:15
Originally by: Joseph Dredd
Edited by: Joseph Dredd on 12/08/2009 08:23:03 but nothing would come close to affecting their profits as much as if everyone who has an account logs on and stays on 23/7.
ok thats so false its not even funny
The system they designed currently has a 500% redundancy at peak load built into it.
But yet somehow they still aparently make a nice profit. Enough so that According to a BBC artical they are literaly the first Game company on the planet to efectivly threaten a goverment just by saying ok we will will pack up our buisness and leave if you dont behave.(granted they are based in Iceland and the fishing industry also threated to pull out with them but you get my point)
Lets face it all they have to do to see whos a ISK farmer is look at whos perma loged into the system. but they never do squat about it.
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Stop freaking worrying about why things the developerd did 5 years and more ago no longer make sence. |
Steve Thomas
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Posted - 2009.08.13 04:32:00 -
[37]
Originally by: nether void
One thing to always remember is getting the cash now is always better than forecasting it into the future. If you get cash now, you can invest that cash and make even more cash with it. It's not as lucrative to borrow on forecasted earnings, and then invest with that cash. You have to pay a premium when you borrow from others. When you borrow from your own future earnings (PLEX sales), you essentially have just borrowed at 0% interest. It's a lot easier to make money on 0% interest loans, obviously.
right now the surpluss plex IS forcast earning, just as long term subs are.(if they were smart and banked the cash from surpus plex and "unspent" sub time) and held on to it untill they "earned" it.
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Stop freaking worrying about why things the developerd did 5 years and more ago no longer make sence. |
nether void
Caldari
Caldari Provisions
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Posted - 2009.08.13 04:37:00 -
[38]
Originally by: Steve Thomas
right now the surpluss plex IS forcast earning, just as long term subs are.(if they were smart and banked the cash from surpus plex and "unspent" sub time) and held on to it untill they "earned" it.
Nope. Surpluss plex is money they already have in their pocket (borrowing against their future revenue). Long term subs are POTENTIAL revenue. It could be there. You can get a loan and use your forecasted revenue as collateral, but PLEX puts the money in your hand now at 0% interest. It's a genius move, really.
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nether void
Caldari
Caldari Provisions
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Posted - 2009.08.13 04:39:00 -
[39]
Actually it's not really borrowing against it. Rather just moving it forward in time.
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LaVista Vista
Conservative Shenanigans Party
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Posted - 2009.08.13 05:21:00 -
[40]
Originally by: SencneS
Originally by: cosmoray
Wrong!!!!
For every Plex that is purchased in-game, one HAS to have been purchased outside of game.
Lower PLEX prices means greater profits for CCP NOT the other way round.
CCP do not like people manipulating the price upwards. That means your $ buys more ISKies.
Tsk tsk tsk cosmoray, I was expecting more from you...
First rule of account is don't take previous months profits and move them to this month losses...
Maybe you didn't understand the scenario here.
I'm talking about the entire EVE subscription base purchasing from a already bloated stockpile of PLEXs. Sure CCP got their money months ago, but like all quarterly reports have zero subscripts over a couple of months (Like my scenario says) would be shocking on the book.
Get out of the customer/player point of view and look at it from an accounting point of view. For every plex that is purchased and NOT used in that month, means 1 less subscription somewhere down the line. CCP is looking at about growing number of those "free" subscriptions, it's already at 18,000. and growing by near 2,000 each day as the graph dictates.
Don't get me wrong I agree with the second half of your post, in which PLEXs are viewed as ISK injectors for people who are poor, but lets face it here, when does $35 for 100mil ISK look attractive, when ISK sellers are selling 2B for the same price.
I would guess, if PLEX did drop this low and maintained this low rate for a month the amount of PLEXs purchased to be turned into ISK would rather low. There is a fine line here, which you would have to agree. I just saying, with 20,000 1 month subscriptions already paid for sitting on previous months profit lines, thats going to be a big pill to swallow when every chooses to cash in those PLEXs for subscriptions.
Sencnes,
you seem to oversimplify accounting. Ccp isn't stupid. The problem you point out is simply fixed by not accounting for plex sales before they are applied to an account. Before that point in time, it is considered non-liquid.
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nether void
Caldari
Caldari Provisions
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Posted - 2009.08.13 05:48:00 -
[41]
Actually if by whatever reason everyone just stopped buying more GTCs and stopped paying subs until the PLEX supply ran out, EVE could easily borrow to keep things going until the money started flowing in again. It's not very hard to borrow against future revenue, although current economic conditions make it a bit more difficult as available cash is pretty limited. Although we're probably only talking about ... a couple mil in operating expenses? Chump change.
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Lana Torrin
Minmatar Republic Military Skool
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Posted - 2009.08.13 06:28:00 -
[42]
Been reading some of the comments and there is only 1 thing I'd like to add to this.. None of this is bad for CCP..
How? Well lets say the price plummets to the floor and people start to buy up PLEXs like there is no tomorrow.. CCP has been overselling game time for the last 6 to 8 months anyway.. Yes they wont receive as big an income for the next 2 months, but this has already been offset..
Lets say the price gos through the roof and no ones buying PLEXs anymore.. Well CCP gos back to everyone paying for their account each and every month. No loss..
At not point and no matter what happens to the PLEX market are CCP out of pocket. At worst they break even, at best they sell more game time than they have accounts.
Now all of you.. Go out and make my PLEXs cheaper so I can stock up on time.
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Durente Galaica
Amarr
Viziam
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Posted - 2009.08.13 06:30:00 -
[43]
Originally by: LaVista Vista
Sencnes,
you seem to oversimplify accounting. Ccp isn't stupid. The problem you point out is simply fixed by not accounting for plex sales before they are applied to an account. Before that point in time, it is considered non-liquid.
This is correct, with the added bonus they can keep it in bank and earn interest on it until someone clicks 'apply to account'. |
Mova B
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Posted - 2009.08.13 15:08:00 -
[44]
Originally by: SencneS
Do you know WHY they released this DEVBLOG even though it essentially screams "BUBBLE IS ABOUT TO POP!" is because it screams "BUBBLE IS ABOUT TO POOP!" They want more people to "Play for free" in fact that want it so bad they mention it several times in the blog.
What I find interesting here is, there is TWICE as many PLEXs in game as there is daily usage, which means even if NO PLEXs where created EVE is the plex usage is subscribed for TWO WHOLE MONTHS! But as you can tell by the "Blue" line that more Plexs are being created then being USED! So this Stock is just going to go up and up and up!
This scares CCP... Oh I'm telling you now it SCARES THE TURDS OUT OF THEM!
Why? Because imagine this scenario...
The "Stock" gets so out of control, that the market crashes, PLEXs are sold for 50mil each, but wait, there is SO MUCH STOCK, that it lasts for MONTHS! Enough stock that the entire EVE subscription base, can afford to buy PLEXs and use them for months on end. What does this mean for CCP... BIG FAT ZERO revenue for a few months.
The fact that right at on this day, not only have the supply toppled the demand, but there was already TWICE as much spare supply left in the game.
Using their numbers.
At this very moment, 8,000 accounts don't need to spend real for a month. 10,500 Accounts worth don't need to spend real money for a month just entered the game, So that brings it down to -2,500 CCP is in the plus.
However 16,000 have spare stock - So that means 13,500 accounts wouldn't need to pay for one month.
Total loss to CCP revenue for a month if all Plexs where used - ($235,912.50) USD
Now tell me that wouldn't scare the tape worms out of CCPs accountants..
This is the MD epic fail 
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Kazzac Elentria
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Posted - 2009.08.13 15:25:00 -
[45]
Actually PLEX are likely handled in the same accounting vein as retail gift cards are, since technically speaking they share almost the same function.
For those that don't know, gift cards are actually put on the books at liabilities which is why they often have cancel dates and fees associated with them. The fees and dates are recovery tools for the existing liability of the card.
Its considered an advance of capital with the understanding that the capital will have to be paid back at some point in time.
...at least thats how I hope the bean counters at CCP are handling the income from PLEXs. |
Dariah Stardweller
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Posted - 2009.08.13 18:06:00 -
[46]
Originally by: Kazzac Elentria
...at least thats how I hope the bean counters at CCP are handling the income from PLEXs.
You're counting on CCP to use common sense? 
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Letrange
Minmatar
Chaosstorm Corporation
Apoapsis Multiversal Consortium
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Posted - 2009.08.13 22:20:00 -
[47]
Um, I think you guys are reading too much into what ccp wants or doesn't doesn't want with Plexes prices.
Look at it this way:
July: 200 accounts payed subscriptions and 100 accounts payed with plexes. the 200 are a cc transaction at the start of the month and the 100 are a cc transaction some time in the past. CCP got the funds for 300 playing accounts
August: 100 accounts payed subscriptions and 200 accounts payed with plexes. Again CCP got the funds for 300 playing accounts so they are happy.
The only time they would see a difference is if they noticed more active accounts when plex prices drop. IF they observe this effect then yes they would prefer to see lower plex prices. But this should even out over time since once plexes don't give a lot of isk, people will stop buying them and the market will recover.
The question is not will there be boom and bust cycles with plexes but rather how violent will they be? From an accounting point of view it's more the total number of active accounts that determines whether CCP is happy or not. So obviously the more chars active the better.
The question is: if plexes were cheaper, would there be more alts activated or would there simply be a shift from subscription to plex for a while? (shifting from one system to the other does not cause a lot of effect from CCP's point of view. It's whether people have more alts running or not.
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SencneS
Rebellion Against Big Irreversible Dinks
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Posted - 2009.08.14 00:01:00 -
[48]
Originally by: LaVista Vista
SencneS,
you seem to oversimplify accounting. Ccp isn't stupid. The problem you point out is simply fixed by not accounting for plex sales before they are applied to an account. Before that point in time, it is considered non-liquid.
I don't think they did or do this. Why would they not count $250K on their books just because they are in un-used PLEXs. And here is why I think that, because it's an in game item. It's already used, and in game, and can not be sold by CCP out of game for real money or removed from the game and reversed back into Cash. In CCP's eyes I would bet real money, every PLEX in game immediate goes on the books as revenue for that month. GTCs on the other hand is a different story. Since they can change hands, be resold and be distributed for sale, even on EBAY, every GTC they sell probably doesn't get converted into revenue until it's used.
I wouldn't be surprised if they implemented the GTC to PLEX convention just to speed up GTC sales getting added to their books as revenue to be honest.
Which brings back to the original point, an excessive amount of PLEXs in game scares them, fair enough they have their money now and even if they "float" from month to month there is a potential is the amount of PLEXs in game unused gets out of control it can financially hit CCP. What is it now, 400,000 accounts, well they are 5% of EVE's subscribed accounts could play for 1 month without spending 1 real life cent for a month. You don't think that would look bad on the books?
The topic of money now vs money later. In most retail scenarios best always better to get money now. However the most desirable outcome is to get a guaranteed constant amount of income month after month. Don't mistake short term goals with long term prosperity. If CCP said they'll sell 2 year subscriptions for $200 and the entire EVE population subscribed to that. CCP would be royally screwed financially. Oh sure they'd have a massive amount of float, but they can't account for every single cost and expense they'll have for the next two years. Trying to do that would be impossible.
Oh sure they LOVE people that pay up front because they get a nice injection of money but only because those are rare not very many do that. Imagine if it was the other way around in which they got 95% of their subscriptions for a year all at once. They'd be scared to spend large amounts on new and untested things, because they know they have to make what they have last a year.
CCP don't want massive amounts of unused PLEXs that is blatantly clear in that blog. Why? I'm leaning toward accounting reasons above anything else. Everyone else is free to think otherwise, but I'd bet money it's because it represents something financially bad to them.
Amarr for Life |
Baka Lakadaka
Gallente
Agony Unleashed
Agony Empire
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Posted - 2009.08.14 04:47:00 -
[49]
The bottom line is CCP will want as many subscriptions paid up in advance as possible. It's money in the bank.
If one of these things happens, CCP is a ahead:
1) A player holding a plex quits or can't continue to play (or hopefully not, dies), CCP has already sold a subscription that won't be used. Some proportion of those plexes will fall into this category.
2) CCP winds up Eve with a number of pre-paid subscriptions outstanding, they won't be refunding these. They are in-game objects and as such belong to CCP already. I doubt they'll purposely screw people, but commercially this is a possibility.
It's the same as your pre-paid movie tickets (we sell them cheaply as a benefit to our customers through my company) - a fair proportion of these are never used. They're lost, go through the washing machine or simply expire after 12 months. Does the movie theatre care that no-one ever used those tickets? No, they have the cash. If they go out of business, do they care? No, they have the cash. If no-one pays to go to the movies for months and they all use the pre-paid tickets, do they care? No, they have the cash. Of course they hope to continue selling more pre-paid tickets, but if they stopped, would they go broke, I doubt it. They have the cash.
______________________
Isn't it time you learned to fight back? Agony Unleashed Home of the PvP University.
Recruitment Closed until mid-Sept. |
Kazzac Elentria
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Posted - 2009.08.14 12:37:00 -
[50]
As I pointed out earlier, prepaid subscriptions work in the same manner as gift cards only technically you've already exchanged the money for the product. You just haven't used the product because its a service item and not a tangible asset.
So for the purposes of book keeping, again I would hope that CCP keeps income from these sources in the liabilities section of any accounting books they have.
Just because you have the dollars doesn't mean you don't have to assess costs for the service prepaid.
The nice thing about prepaid service items though is that you can more accurately predict any infrastructure changes that might need to occur. |
Chi'kote
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Posted - 2009.08.14 12:57:00 -
[51]
Originally by: SencneS
I don't think they did or do this. Why would they not count $250K on their books just because they are in un-used PLEXs. And here is why I think that, because it's an in game item. It's already used, and in game, and can not be sold by CCP out of game for real money or removed from the game and reversed back into Cash. In CCP's eyes I would bet real money, every PLEX in game immediate goes on the books as revenue for that month.
Well, why wouldn't they recognize the revenue? Because a company can't just record things however they want. They can for internal purposes, but anything they submit for the public to see will have to follow a set of rules. For example, GAAP accounting requires you to recognize revenue when earned, not when cash is collected. So, CCP sells these plex. That actually gets recorded as a liability on their books. They increase their cash, and increase an account called "unearned revenue", which is a liability. They are not allowed to record that sale as revenue until they "earn" it, which in this case would be supplying the holder of the plex with 1 month of service. I assume CCP follows IFRS (international financial reporting standards), which follows GAAP (american version) on this issue.
So, all these plex floating around did increase CCP's cashflow when purchased, but they are actually held as a liability on their books until they supply their subscription service (plex turned in). Then it can be recorded as revenue.
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Chi'kote
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Posted - 2009.08.14 12:59:00 -
[52]
Originally by: Kazzac Elentria
So for the purposes of book keeping, again I would hope that CCP keeps income from these sources in the liabilities section of any accounting books they have.
Wish I had read all the way down to your response before I went through mine
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Kazzac Elentria
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Posted - 2009.08.14 13:19:00 -
[53]
Originally by: Chi'kote
Originally by: Kazzac Elentria
So for the purposes of book keeping, again I would hope that CCP keeps income from these sources in the liabilities section of any accounting books they have.
Wish I had read all the way down to your response before I went through mine
It happens 
Its funny because business do a myriad of things with these liabilities, but at the end of the day they are still considered off limits per se from operational stuff most of the time.
Don't even get me started on how government operations deal with these though (not gift cards obviously but advancements on grants, stimulus dollars, etc...). Its enough to make an actual CPA wanna grab a gun. |
Chi'kote
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Posted - 2009.08.14 13:49:00 -
[54]
Originally by: Kazzac Elentria
Originally by: Chi'kote
Originally by: Kazzac Elentria
So for the purposes of book keeping, again I would hope that CCP keeps income from these sources in the liabilities section of any accounting books they have.
Wish I had read all the way down to your response before I went through mine
It happens
Its funny because business do a myriad of things with these liabilities, but at the end of the day they are still considered off limits per se from operational stuff most of the time.
Don't even get me started on how government operations deal with these though (not gift cards obviously but advancements on grants, stimulus dollars, etc...). Its enough to make an actual CPA wanna grab a gun.
I am an actual CPA, and I confirm this message 
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Jadun
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Posted - 2009.08.14 14:25:00 -
[55]
yo ho all
me thinks we have to get ready. the sky is falling. CCP is going to shut down the server wipe all char and start over. if you read the dev blog upside down while rubing your tummy + patting your head at the same time, you will see it.
there are secret signs and symbols. every body will start with a new noob char, a noob ship + all unused plexes they own in their starting hanger.
best wishes |
Oneiros IV
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Posted - 2009.08.14 19:54:00 -
[56]
Well, logically there's two categories of subscribers: PLEX consumers and PLEX generators. People who buy PLEX'es for own use and players who buy them with RM to get ISK.
I don't see any risk for CCP in plexes becoming easier to buy with ISK, since if there's plex in game somebody already paid for it, besides one thing:
Shift in the proportion of two categories I just mentioned, we can assume that the plex flow will remain same for a while - (plex costs less ISK, plex generators buying more to fund their PVP habits, withstand POS warfare w/e.)
But in this scenario PLEX generating powers of eve getting concentrated in the hands of fewer people aka those who don't mind investing RM into comfortable gameplay. Would be logical to assume that minor group is way more vulnerable to all kind of social disasters, like getting burnout (and these players in game for a while already) getting hit by the truck, married etc and the negative impact on PLEX generation getting quite significant.
Am I thinking the right way?
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KaarBaak
Minmatar
Squirrel Team
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Posted - 2009.08.14 20:47:00 -
[57]
I agree that this is a two-sided equation. If the price paid for plex/gtc goes below a certain point, fewer will be created. Those that purchase gtc with RM want to get certain price. If I can get 600M/gtc then I will convert a couple to purchase my new ship/pos. But if I can only get 400M, then I will wait until prices come back up before I create two new PLEX.
The question I have is : who is holding onto those PLEX? are they "buy-and-hold" speculators? People who were speculating and got 'caught?'. Or are they just plex-players accumulating play time?
KB
Beware the beast Man, for he is the Devil's pawn. Alone among God's primates, he kills for sport or lust or greed. Yea, he will murder his brother to possess his brother's land. |
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