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Tech 2 BPO Returns

Stirring the Hornet’s Nest

The allure of Tech2 BPOs is high and the history surrounding them is very controversial. If you don’t believe me, perform a search on the forums and you will feast on delicious tears. Industry people have been forum raging about this topic since the introduction and CCP has not dared to make any adjustments to them.

Short refresher for non-industrialists: T2 items are manufactured from an invented blueprint copy that, based on success, comes from a copy of the T1 BPO + datacores + sometimes a decryptor to modify attributes of the end T2 BPC.

Owning a T2 BPO means you can bypass the invention process and manufacture with solely the T2 BPO that has unlimited runs.

Why the bitching? The majority of forum posts about T2 BPOs complain that the individuals who won them during the lottery phase print ISK.

Yes, they were very lucky and didn’t have to put down multiple billions for the BPO. Yes, they had a monopoly on T2 production. Had. The invention system, which was introduced after the lottery system, allows many people to participate in the T2 process. More competition, lower prices.

What’s the allure? For you PVP people, think of a T2 BPOs as a Titan — a giant prize that you can show off, protect, and use to enhance your infamy. When I first started getting into industry in 2008, I thought these were the win button of Eve.

Now the only way to get one is to buy one from another player, which brings me to my research. I want to show everyone that even though they do make money, the return on the investment is very poor in the majority of cases.

The Research

Below is a list of T2 BPOs that have sold on the public Eve Online forums. I used a market program to figure out the yearly profit and divided that by the sold cost to get a return.

Though you may be drawn in by the yearly profit numbers, consider the amount of ISK used to achieve that number.

A few of the BPOs seem to have a reasonable return and might even be a slightly reasonable investment if you can keep it producing 24×7. It looks like some Ammo, Mining Crystals, and Torpedo BPOs will start to turn you a profit beyond the original investment in 2-3 years. I would definitively stay away from the 5+ year items as I think a change to the invention, research, or nerfing of the T2 BPOs will most likely happen soon(tm).

A Loss?

Yes, I have found that a few (maybe 3-4%) of T2 BPOs return a loss. The ability of players to out manufacture with the Invention process sinks the profits below that of a researched T2 BPO. Keep in mind that if you own a T2 BPO, you only produce one item. During the build phase you can’t do anything else with the BPO.

The beauty of the invention framework is that you can be more flexible and can react to changing market conditions. The drawback is that there is an increase in the complexity to produce an item.

Better Methods

If you have piles of cash and want to sit idle in a manufacturing station making sure your T2 BPO is constantly in production, you might want to consider buying some. For the average industry person or corporation, it is a very poor investment.

To compare performance numbers, I am making around 8 B a month turning over 31 B. A T2 BPO, equal to around the same amount of capital, will make you 3.5-7 B a year.

Not a solid investment in my book. Put your money elsewhere.

Rage Against the Machine

I haven’t seen an idea to resolve the imbalance that I have liked yet. More on this later.

It does seem that the market impact isn’t as big as the hype indicates according to CCP Diagoras.

[update] April 4 2012

@CCP_Diagoras

The Good

93.95% of T2 Gyrostabilizers produced in March 2012 were from invention.
In March 2012, 90.23% of Hulks and 84.17% of Mackinaws produced were from invention.
89.77% of 1400mm II, 82.00% of Tachyon II, 87.34% of 425mm Rail II, 74.23% of Torpedo Launcher II produced in March were from invention.
55.25% of Improved Cloaks and 91.93% of Covert Ops Cloaks were produced via invention in March 2012.
86.81% of 220mm Vulcan Autocannons produced in March were produced through invention.

The Eh

67.85% of Sabres and 65.01% of Wolves produced in March 2012 were the from invention.
72.27% of the 2,005 Falcons produced in March 2012 were produced through invention.
66.13% of Ishtars and 63.53% of Zealots produced in March 2012 were produced via invention.

The Ugly

27.60% of Curses and 22.16% of Pilgrims produced in March 2012 were from invention.
Only 7.07% of Absolutions and 23.62% of Sleipnirs produced in March 2012 were produced through invention.
44.58% of Cerberus and 6.00% of Eagles produced in March 2012 were procuded through invention.

tl;dr

Post lottery, T2 BPOs do make very passive income for a very large price. For the time it takes to get a return on your investment, the capital could better be spent in other areas.

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15 Comments on “Tech 2 BPO Returns”

  1. midi2304 says:

    8b a month? Shit the bed. I am doing EVE wrong. I thought incursions were good ISK…

    • anon says:

      There’s a guy in TEST who solos incursions with 10 tengus. he makes 6Bil / day easily.

  2. Chanina says:

    Hi there, I’m one of those who don’t like T2 BPOs at all. Your research is very solid and you are absolutely right.
    Buying one now is very risky because there may be changes soon. They will most likely change short after you bought one. So you will loose money.
    And yes, with the invention you are far more flexible and you can produce a lot of stuff instead of 1 or 2 items. And you can produce parallel since you more often than not get more inventions through than you can build things.

    And the argument that T2 BPOs destroy the prices is most of the time void too. maybe in the cases of mining crystals it is true but more often demand is much higher than the bpo owner can produce.

    So buying a T2 bpo now is a risky investment. But that is exactly the point I get mad about T2 bpos 😉
    You can’t buy them reasonably or only with a large stack of money to spend on. If you do so, you make someone else very happy and very rich.

    So the bpos aren’t really flowing in the market. There are some rare cases to buy them but thats not reasonable movement.

    And now comes the point I’m really annoyed about:
    The one who already has the bpo is getting a lot of money no matter if he decides to sell the bpo or build from it. The default modules are soled something around (just a wild guess) 10% over production price from Invention. The inventor makes a bit money with selling it and thats fine.
    The BPO owner builds the same item without the +50% waste factor the inventor hast to invest. That means his production cost is about 30% lower than that of the inventor. Even if prices for the module he has are low, he will most likely still make money with it.

    Once the prices are low, inventors will stop producing this item and price will go up again since as i stated before the T2 owner cant sustain the demand. But during that time, he will still be making a gain of 25-30% per module if he don’t dumps the price even lower.
    There aren’t really many modules out there to invent where you have 20% gain over a long time. The bpo owner has it, no matter how bad market is.

  3. Your negative profit conculsion is bogus, sure, one manufacturing slot can’t compete with multiple slots, but just because your first slot is permarunning a T2 BPO doesn’t mean that your other production slots are sitting idle.

  4. Tom says:

    I was going to post something here but Chanina, covered my points very nicely (and without rage, which is something I may not have been able to do).

    I understand their reason for existence, Eve is full of legacy systems, mechanics and examples. But this is not a dreadnought in hi sec mining veldspar. These have a very real effect on game play today.

    As for your numbers I do wonder if there are enough ships actually moving in the market for some of your numbers. Lacheis, huginn and harpy all spring to my mind as well volume moving poor ships (but I may well be wrong on that)

  5. Bel Amar says:

    Sorry, it’s just false to say that some t2 BPOs are running at a loss because of invention. Even a non researched BPO will have a lower build cost than the equivalent invention BPC. It doesn’t matter how many people build stuff via invention, a BPO job will ALWAYS turn more profit per unit, and will still turn a profit in some instances when inventon won’t

    The reason some of these things sell at a loss is a combinaton of people not knowing how to calculate profit margins correctly for invention, combined with a desire to build the cool stuff (ie ships). So they often end up missing the fact they’re running at a loss or simply don’t care

    • Bede says:

      you could run a bpo at 100% production, but if your not selling 100% then well its a waste of a slot you could be using to build something else.

      there’s numerous items in eve that fail to sell in any significant volume. so you have wasted capital in a expensive bpo, that could have been better spent in something else.

      also lack of flexibility kinda sucks,

      t2 ammo bpo’s would potentially be worthwhile, even for fitting out an alliance ammo dump.
      also t2 drones, would be nice to have for a major producer, but you can still be out produced by a single dedicated drone inventor.

  6. […] you are interested in further Tech 2 BPO research that I have conducted, take a look at the T2 BPO Returns post. Rate this:Like this:LikeBe the first to like […]

  7. […] BPO remain in the game across all unbanned accounts, yet this little ship is carrying 3 of them (this thread has a remark by one of the CCP devs that hulks built via invention account for over 90% of the […]

  8. […] at the research I’ve conducted about how just poor of an investment these items can be: Tech 2 BPO Returns and Percentage of Items from Invention vs Tech 2 […]

  9. David says:

    The issue isn’t the buyers return on investment. It is their effect on the market and the game overall

  10. […] data that I have from my previous post on Tech 2 BPO Returns, I did another scan of prices and added them to my records. This gives me a sampling of prices from […]

  11. Jason Rooke says:

    I Have noted that all of the costings of BPOs to BPCs have not tacken in that a BPO can be copyed and the run the copes to us all of your slots. This then gives you the best of both worlds. you would never build from a BPO T2 or T1 when you can copy it and build from that.

    • Dave Null says:

      Copies take time to make. Currently longer than the manufacturing time, i.e. to create 9 copies takes longer than manufacturing 9 items.

      The summer expansion will change this, though copying still won’t be instantaneous.

  12. Corwyn Rand says:

    I posted this in the comments for the new Researching Dev Blog

    https://forums.eveonline.com/default.aspx?g=posts&m=4531725#post4531725

    Balancing Tech II BPO vs Invention of Tech II BPC

    I have a concept for removing the advantage of owning a Tech II BPO without removing Tech II BPO’s from the game

    I have never done any invention in my life I have no idea of the variable costs of inventing but just seeing all the complaints about how owners of Tech II BPO’s have the advantage I thought the following might balance them out:

    1. Make copy time of a Tech II BPO = to Invention time of a Tech II BPC

    2. Make cost of copying Tech II BPO = to cost of Inventing a Tech II BPC (I know variable costs, how do you work this?)

    3. Make Tech II BPO’s Copy Only (No longer usable for manufacturing, only used to create copy’s)

    p.s. I have no idea how complex this would be to code but hopefully it’s something for the Devs to consider


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