July Financial Report

Overview

June and July were periods of rapid growth, both in terms of buying power and activity spread. I’m now able to have my fingers in more markets and more item types, helping to spread the risk.

Graphs!

Out performing the liner projection the past three months.

My purchase sprees have grown in volume over the past few months. They keep topping out at larger amounts.  18.5, 21.1, 25.2, and now 25.5 B purchased in a single day. I love seeing the holding account balance go up, but liquid ISK is idle ISK. Throw is back into the market unless you are accruing a balance for a project.

Major Points

1. New milestone reached as I moved 103.7 B ISK this month.

Subscribing to the Bulk Trade mailing list has fueled buying in large quantities. Why buy two Scimitars off the market when you can buy 20 and get a discount?

2. Speculation on Cobalt

I logged into Jita about 35 minutes after the Devblog was posted citing changes to Alchemy. At this time the majority of Cobalt was off the market, so I was only able to get 26k units @ 1,580 (41.7 M) and then I foolishly bought 15k units @ 7,000 (110.7 M).

As of this writing, Cobalt is sitting at 2,800 in Jita so I highly doubt that I was turn a profit on these speculative trades. I didn’t run the numbers after the announcement so I’ll accept the loss on this.

Despite the loss, it was fun to refresh the markets and watch the speculation drive prices. I hope for more changes to the moon market this fall.

3. Mobile Application

This has proven to be a powerful way to remain connected to the market. I’m currently able to monitor sales and purchases. This lets me keep mental notes of what needs to be restocked or adjusted. In the future we hope to expand it with more Android style touch options.

Some ideas that we have been throwing around is that of a cart. If you are about to sell out of an item, it will shade the row and holding down on the row will bring up an action menu. You can look up history, item trading performance, or add the item to a restock cart.

4. Industrial Partner

Raath, the author of Staticmapper and DRK Industry Tracker, and I are forming an industry and trading partnership. I’m taking my idle stack of blueprints and putting them to use.

We’re polishing off our invention and Tech3 production skills so we can start to mass produce ships and modules. *sigh* do you know that it is going to take 50+ days to be able to produce a Tengu hull and Subsystems?

Idle blueprints

Invention skills

5. Implants

The adjustments to Faction Warfare rewards killed profits on implants for me for over a month. I waited for the price to adjust and am back to trading these in high volumes again. In the past month implants are back in my highest performing group and I’ve moved 2,880 implants in the past 30 days.

6. Wallet Manager

For those of you that have been asking about my Wallet Manager program I have good news. A group of developers is using inspiration from our team and is coding up a public version for everyone. I chat with them daily on irc.coldfront.net and will have a post about this once we have some public-facing content.

The Future

I’m going to get my new partner, Raath, up to speed on the trade operation. He is bringing a large number of production alts so I’m looking forward to putting all our idle blueprints to use.


Percentage of Items from Invention vs Tech 2 BPOs

A while ago CCP Diagoras posted some statistics on Twitter for the percentage of items that come from Invention vs Tech 2 BPOs to help quell the tinfoil hat theories that Tech 2 BPOs control the entire market. I recorded and sorted the tweets, but never released them.

What does this mean for you as an inventor looking at the market? Well, you will most likely want to stay away from the red items as the Tech 2 BPO owners have a stronger control on the price and can undercut you below your profitability threshold.

If you are interested in further Tech 2 BPO research that I have conducted, take a look at the T2 BPO Returns post.


June Junk Drawer

1. Interested in the current tone of CSM-CCP relationship, the future of industry, and hints into the Winter expansion? Listen to VandV Podcast: Special Edition: Spring Summit Wrap Up podcast which contains an hour of content with current chairman @Seleene_Eve.

2. Chribba posted a screenshot of his Titan mining operations in lowsec.

3. I gasped at the sov map for a minute before discovering that there was a zero in the name.

4. Endless Space, a 4X turn based space strategy game, has been recieving a lot of my attention over the past month. The Beta is available right now on Steam and patches have been coming out every week or so with balances, new UI elements, and bug fixes.

I’m really interested in this game because the same game format is XML that is compressed in a .bin file. You can uncompress it with 7-Zip and then edit it in Notepad++ to change planet or hero attributes, technologies, global events, or even star system locations. The mentality of the development team is one of openness with the community and they are very active on the forums while polishing up the Beta.

5. I’ve contacted some Tech2 manufactures and have started to buy in bulk. You can generally get 5-10% Jita price, which does nothing but increase your margins.

6. Since I haven’t been actively playing much this month, I put some idle BPOs into copy research for some very passive income. There are idle or low wait empire copy slots, you just have to look for them. Hint: go to lowsec. I just know one of these days I will encounter a smartbomb.

7. To help solidify my claim as a bittervet, I picked up some Anaconda Mines.

8. I have an itch for a large scale public investment project, but lack any type of formal finance training. I wish Eve had a stock market so people could invest in my trading and manufacturing operation. I don’t have any idea of where to start, what the payout would be, or how to manage risk when you start to work with other people’s money; I would not want to be Eve Bank 2.0.


What’s In Your Hangar?

I’m following the trend that Rixx Javix started and posting my goods. As mainly a trader and researcher, I don’t feel like I have a large fleet of PVP ships as I try to maintain a lean operation. ISK goes back into trading and manufacturing operations instead of sitting as a rusting Minmatar hull in a hangar.

I’ve blanked out the majority of my ship name but I’ll let you know that I name them all after Babylon 5 ship classes.

Trade Alt

This character sits in Jita 4-4 and moves and/or ships items around. I think of this guy as the holding account.

(396) Various capital part BPCs left over from copying capital part BPOs for passive income
(293) Various Tech1 BPCs left over when I used to do Invention
(14) Invented Tech2 module BPCs
(5) Invented Anshar (ME -1) BPCs for JF building
Ishtar, Onyx, Phobos, Pilgrim Invented BPCs

(1) Freighter
(2) Jump Freighter
(1) Orca
(5) Iteron Mark V

Long-term Storage

Research Alt

This character is working with around 290 BPOs worth around 13.59 B. I’ve always wanted to be able to produce anything in the game so I bought up the majority of the common module, frigate, and cruiser prints. The only Battlecruiser prints that I own is a set of the Tier3 ones.  I have no intention to ever produce Drakes/Hurricanes due to their small profit margin. I also don’t own any Battleship prints as I like to fly T1/T2 cruiser hulls.

Awaiting ME/PE research

Getting things done

Research alt junk drawer

Capital Bittervet Pilot

Capitals in lowsec and random Bombers

Random PVP ships

Random PVP gear

Subcapital Pilot

I’m training this character to fly all four racial Interceptors, Recons, Logistics, and standard BCs. I also have him trained for the standard T2 Alpha Maelstrom because it is such a common request in nullsec fleets.

Nullsec PVP ships

Random PVP gear

Other Posts

Rixx Javix
Ardent Defender
Jester’s Trek
Kirith Kodachi
reddit.com/r/eve post


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.


Stackable Blueprints

When I started doing industry jobs, I found it very annoying to constantly look up the item details for each blueprint and I often lost my BPOs in a sea of BPCs.

After looking on the forums, I found that many people were asking for a icon change. CCP’s response was that their look-up query for blueprints was very database heavy (costs a lot of resources) and there would need to be some major reworking of their database structure and query code to give the client the ability to quickly differentiate blueprints.

Here I was in 2008 getting annoyed while I found forum posts dating back to 2004 asking for this change!

With Incursion 1.5 (May 2011), the icon change for BPO/BPCs hit Tranquility and I rejoiced because my industrial life was forever changed. Simple change with a large impact. I believe than when they transitioned to 64-bit numbers for items, some work was done to rectify the database query and code was cleaned up.

I would like to rally all industry people for another change. For any person that does industry, you work with a large number of blueprints. I would love if there was the ability to stack items of similar ME/PE.

Here is a mock-up of two versions of stacking for blueprints:

The version on the left seems to be easier on the eye as the information is displayed in a banner format at the top.

CCP, here is your Agile user story:

As a person that performs industry jobs, having a way to organize a large numbers of blueprints would declutter the UI and simplify working with them.

Put that in your backlog and work it into a Sprint planning meeting.


PI Customs Office Changes

Another iteration of PI is coming to the server. The existing Office structures in orbit around planets in lowsec, nullsec, and wormhole space will disappear. Players will have to build their own player-controlled Offices in order to move PI items on and off of planets. Note: Highsec will not be affected.

For 6,000 Concord LPs and 20 M ISK, you can get one Customs Office Gantry BPC. Interesting move that the BPO will not be released. This means that people will have to continually engage in Concord LP activities such as Incursions or Faction Warfare.

Jester went into detail about the gameplay changes due to the hit point values, reinforcement timer options, and LP requirements, but I wanted to cover the market aspects of the changes. You might be able to make a lot of money off of the changes. When PI was first introduced, I was able to turn 2 B into around 5 B by playing the speculation game.

Disclaimer: Everything I say and quote could be entirely wrong so do your own research.

As soon as the devblog was posted, the market speculators began to buy up the component items. The consensus is that when this goes live all existing PI in lowsec, nullsec, and wormhole space will be affected. There is going to be a delay to get the new Customs Offices in place because people will have to obtain a BPC from the Concord office, build the Gantries, and anchor them in place. Additionally, there will be a wave of people that will consider this effort to high and give up on their existing PI production. Prices for the parts that made the Gantries, items for POS fuel, and T2 production are going to increase.

Manufacturing the Customs Office Gantry Upgrade to Customs Office
Integrity Response Drones: 5
Nano-Factory: 10
Organic Mortar Applicators: 10
Sterile Conduits: 14
Capital Construction Parts: 1
Broadcast Node: 8
Recursive Computing Module: 8
Self-Harmonizing Power Core: 8
Wetware Mainframe: 8

If you want some hard speculation numbers, a 40-60% increase short-term in the first few months and a general 20% increase over the long-term seems reasonable to me. Take a look at the speculators in action in The Forge.

Now is not a good time to have to buy POS fuel. I hope you have 6 months to a year in reserve!