Greedy Goblin

Thursday, August 23, 2012

The FW-LP "goldmine" is highly speculative

The blogs, comments and forums are full of Faction Warfare LP collection, as a way to get dirty rich with no risk, skill or effort. I guess anyone who is any level proficient in economics runs screaming from anything that makes him rich with no risk, skills and effort. There were many such things in history, and not one of them ended well.

How does the magic FW-LP goldmine works?

It mostly based on exploiting the bad design of FW mechanics. This should be the first red flag, last time 5 guys did that they got their ISK reverted, but let's assume that for some reason CCP just fixes the feature and anyone got their loot before the fix could keep it. The idea that they will forever allow making 3-400M/hour by AFK-orbiting an object in an frigate is laughable.

So let's assume that you can keep the LP and go on. The magic recipe continues that you must reach T5 faction control as it greatly decreases item prices. In the LP store you must pay ISK (or basic item) and LP for a faction item. The higher warzone control decreases these prices greatly. This is the second speculative step, you must assume that your faction will reach it, that CCP don't change it to something that actually makes sense and you'll be there to cash out.

Let's go on. You paid lot of ISK for items that sell high on Jita, you won! Just like every Tom, Dick and Harriett who bothered to do the same. After all you did nothing that needs skill, access to special resources, team or anything. The idea was all over the internet, so the assumption that you'll do it alone is a bit weird. So in the same minute you create your implant, faction ship or faction ammo from thin air, other thousands or maybe tens of thousands do the same, getting hoards of items that sell in the volume of 5-50/day in Jita. That will be some serious price crash. Last time Minmatar hit T5, all my Rens and Hek buy orders were filled up and they weren't high. The buy orders disappeared completely, even the very underpriced ones.

Let's summarize: you'll be dirty rich by AFKing in a frigate if:
  • CCP don't fix AFKing in a frigate being LP print
  • They don't fix the screwed high warzone control bonuses
  • Your faction reaches T5 and you'll be online when they do so (both Minmatar T5s lasted for an hour or two)
  • The prices of the LP store items don't drop to the floor when it happens
Good luck!

Before you'd say "but incursions were an ISK print for long time before fixed", please note that incursions needed a team, good skillpoints, good ships, not being wardecced and knowing what you are doing. It locked out like 99% of the players. And even in its peak it was like 100M/hour which is in line with other top-level PvE actions like supercapital ratting or WH capital escalations.

Please read the title again. It says "highly speculative" and not "impossible". The above conditions are unlikely but can happen. After all those who wrote the posts did these in the previous T5s. Maybe you can do it too. But thinking that you surely can is insane. The speculative profit is very high but it correlates with risks. I always shy away from speculations and never regretted this stance. But that's just me, who never made good money.

PS: every now and then someone speaks up that the "mining is boring" problem must be solved. Yet none of them was near even understanding the problem. Until now. This is a "must read" post, especially if you are CSM/CCP.

PS: Titans are still in my hearth so I keep my eye on them. Including this poor thing that died to Mates after jumping instead of bridging. I don't comment on the mistake itself, but can someone explain why a titan which is not grinding structure protected by 1000 subcaps is in that full DPS fit? I think a titan when not actually deployed to grinding should be fitted to max tank to live long enough if surprised. Am I wrong or the titan pilot was doubly stupid?

Thursday morning report: 151.7B (3.5 spent on main accounts, 2.4 spent on Logi/Carrier, 2.2 on Ragnarok, 1.6 on Rorqual, 1.4 on Nyx, 1.8 on Avatar, 2.6 received as gift)


Anonymous said...

i agree that the fw systrm is broken but you missed one thing. it isnt printing isk, only LP. buying the items removes isk from the game. since ccp feels the game has too much isk right now they might be slow to fix it.

Dioxin said...

CCP could rework the market mechanics as they stand and tank your margins overnight. They could deem the sheer total profits of your characters exploitative and reverse everything. There's no telling what the devs might do in the future with absolute certainty.

Besides dirt cheap frigate hulls, the only thing week old FW plex orbitrs risk is time. Meanwhile every day you're playing the market you're not only putting up your time but billions in capital as well. Who's being more speculative here? To not take advantage of minimal risk, disproportionate effort vs reward situations right now because profits might not always be so high in the future is illogical.

Gevlon said...

@Dioxin: the main speculation point is that FW people are collecting LP with the HOPE that they can cash it later for ISK

Dioxin said...

How's that any different than putting up a buy order in the hope that you can cash it out later for a profit?

Alkarasu said...

"with the HOPE that they can cash it later for ISK"

It's not a speculation point, it's hard truth. The speculation point is for how much.
LP points can sit there as long, as EVE stands, CCP won't likely to remove LP shops from the game. So anyone who made some LP in any way can start cashing it any time they want. The only thing, that really changes, is LP value, but not the fact, that it always have at least some value.

Nursultan said...

Bear in mind that even at Tier 3 this is not a bad profit (over 40 million per hour using Fleet Stabbers for LP conversion) for a semi-afk activity which does not require any significant investment and can be combined with PVE/trading/industry in a second window.

Anonymous said...

the investment is minimal (2-3 days of training on an alt, a couple of t1 frigates) - as long as CCP doesn't nerf FW plexes right before you start farming it is very likely that you will be able to turn a nice profit.

So far the adjustments done by CCP (removal of EWAR from NPCs in plexes) make plexing in frigates easier not harder.
There is absolutely no information pointing towards an imminent nerf (and given CCP's worries about inflation they have an interest to keep this isk sink running for a long time).

The "HOPE" that you may be able to cash out later is well-substantiated as everyone has the same motivation - the players on your team eventually want to cash out as well while the players of the opposing faction want you to cash out so they can start to retake systems (only offensive plexing gives rewards).

The current FW system rewards coordination between the opposing militias for mutual profit (and many people have alts on both sides to make up for the times where one side is on the defense).

Will prices for LP items crash to the point where FW will be unprofitable even if you cash out at T4/T5?
I doubt it - long-term the "go to" item for FW LP farmers will probably be the datacores as demand for navy ships and implants is rather limited and I don't see them showing any signs of crashing and not recovering so far.
Also consider that as prices for LP items that are not unique to the FW store (implants etc) decrease the profitability of mission running (which is a competing activity) goes down as well.
Prices will probably become more stable as traders learn to trust the cycles of FW-related items and even out some of the volatility.

DSJ said...

As with any speculative venture there are ways to mitigate the risk. If someone were willing to invest the time they could easily set up (4) alts and place each of them within the (4) factions. By spreading out the LP points achieved you could more easily guarantee that your cash out would be consistent. The variety of items sold and the inclusion of data cores into the LP stores guarantees a certain minimal ability to modify your stock and cash out strategy depending on what you see the other LP cash-out players doing. The majority of them are going to be cashing out into the popular ships and implants with obvious impacts on the Gevlon buy orders, that argues there will be some room for less obvious but still lucrative cash-outs to occur in the less well known or traded items.

Anonymous said...

the only thing wrong with faction LP is the mechanic itself, plexing is boring

and anyone claiming you can do it afk is speaking half truths

ive done it for quite a while, you still need to keep an eye on system as your never safe in there
dont pay attention for a minute and you have a 4000m/s interceptor tackling and killing you

the profit being made from LP items is player to player trade, so it has 0 impact on the economy as a whole and i doubt CCP really cares about a quick fix
its not an isk faucet, just easy profit for those that do faction war that does warrant some changes on the next FW tweak

JohnDunk said...

What if we consider a solution that might fit immersion as well as basic supply and demand? Each faction is rewarding its capsuleers out of their own war budget. That war budget isn't unlimited. It would make sense that the number of LPs awarded varies based on demand. If capsuleers are getting more and more out of the Minmatar Republic then they'll start paying less - after all, they're getting what they want . Now the number of those LPs available could also go up as the faction controls more systems - that makes sense as the faction is commanding taxes from those regions.

For a game that likes to think in terms of economies, the lack of modeling of the non-capsuleer economy is a pretty glaring fault and seems to be the root of a number of these things.

mynnna said...

The only real major risk is CCP reversing all of this, and speaking as one of the last five to exploit FW, I see that as hysterically unlikely.

As to your other "risks"?If they fix AFK frigates or the screwed warzone control, you still have the LP. If you're offline when Minmatar hit T5, you can buy later at T4 or wait for the next time. And the majority of LP store items CANNOT permanently crash, because they're also supplied by mission runners - crash them too far (below what the mission runners have to pay for them) and they stop supplying them. Mission runners are the bulk of these markets, so them not supplying would keep the price up. And, while 80m/ea for a +5 implant seems like a "crash", it's still 1500 isk/LP at tier 4, 4000 isk/LP at Tier 5 - quite lucrative.

Steel H. said...

To answer your titan question. Supercap retardation - it has never been seen in EVE before... Or just plain retardation.

Now of course, in EVE, as opposed to other games, mistakes are being punished, and darwinism is hard at work. But it's hard fucking work...

Tego said...

I do love that people seem incapable of following an argument. For the above Re Read the post Gelvon never says that you cant make money off it, just that you cant make tons of money off it. It is a farming activity that produces a quantifiable product: LP His statement is that its a trap in terms of a get rich quick scheme. Can you make money off of it? yes there is no reason to believe that is going to change. Can you make metric tons of money off of it? Its possible but not guaranteed. So it comes down to paying yourself burger flipping wages, with the possibility of winning the lotto, or are you paying yourself upper management wages?

Dioxin said...

If burger flipping jobs offered 95% odds of winning the lotto jackpot I'd flip burgers without hesitation.

Tego said...

Odds of winning in most US lotto (referring to powerball multi state here since it covers some 90%+ of the population, and it isnt a half bad example) is something like 1 in 33... so flip burgers and play the lotto often odds are that if you put money into it every day in the form of one ticket you will win a prize about once a month over the long haul, Of course minimum payout is $4 for matching the powerball alone which takes a $3 ticket, and has odds of 55 to 1 against. So the odds of you winning the lotto are great if you play often. the odds of you winning enough to cover the expense of playing? not so great. Can you get relatively large sums of money for your effort if you are smart, somewhat lucky (alliance reaches lvl 5) and you are on during that time? yep sure can, especially if you are prepared to hold your takings for a while after so that you miss the price fall that accompanies the rise in supply versus demand.

Now, the speculation part. the thing that drives people who want to make the kind of money it takes to build multiple titans in less than a year away from the activity:

1: Very limited liquidity at the high profit margin. you can always cash out your LP, but you have to mold your life around the game at least somewhat to be able to cash out at the big money levels so you are on at the right time. This takes what? month or more to drive your alliance into that territory? what happens if they get close and a group of griefers decide to stop it? another month or so before you can cash in....

2: non existent diversification: all your profits are in the form of LP, a mechanic change in that part of the game could halve or quarter your profits on already earned, but still held LP. In contrast trading in multiple things means that a change to one section of the game can only effect one section of your profits.

3: Limited reinvestment incentive you could multibox for added profits, therefore reinvesting through plexing gametime but it is a completely time limited activity. It takes x amount of time to earn y lp. trading gives you the ability to earn more because increased capitol means you can invest in higher priced items, afford to hold them longer though troughs in demand or spikes in supply, and even profit from those spikes by increasing inventory.

It pays out. just like the lotto's in various states, and coutries do. but because of the structure you are the lotto player, hoping to make it big. I, and people like gelvon would much rather be the guys running the lotto and getting the profits from it. because really the people running the lotto don't care if they have to pay out half a billion dollars in earnings if they took in several billion dollars in the process.