Friday, September 20, 2013

Why there are no industrial corporations in MMOs?

In all MMOs there are organized player groups, guilds, clans, corporations. However they are all “armies”, groups created to fight together as a unit against a raidboss or other group of players. Of course there are also dysfunctional groups where people just hang out and share porn links or childish jokes without progressing in the game. Despite there is industry (moneymaking) in all MMOs, I’ve yet to see a group that is formed with the goal to make members rich. This is surprising because the real world is full of corporations with this very goal: owners get rich from profit, employees from salary (at least more rich than with other options). Why not in MMOs?

To see this, we first have to see the reason of existence of real-world profit oriented corporations. I mean why does someone join a corporation instead of starting his own small business? The answer is not “specialization” as “miner and hauler join up to get minerals out of the ground and transported to the refinery”. Specialization is handled by the market. The miner could hire the hauler for a fee or the hauler could buy the minerals in the mine and sell for higher in the refinery. That not only doesn’t need them to be in a fixed group but it’s actually counter-productive as one of them is always limited by the other (the miner could mine more but the hauler can’t move more). There is no such limitation if you buy services in the free market.

Corporations have two real purposes. The first is concentration of resources. You can’t just open a mine in the middle of the nowhere if you are a miner with all skills and equipment to mine. There are no roads, electricity and you can’t hire services in the middle of the forest, neither for your business (no truckers or repairman available) nor for your personal existence (no food to buy). A corporation has the size to build the infrastructure, hire services and have enough main-line members (miners in a mining corporation) to share the costs (one miner can’t keep a coffee shop alive, thousands can). In MMOs such concentration is not needed because infrastructure exists everywhere and the world is very small. In most MMOs you can instant-travel, but even in the “realistic” EVE Online you can get to a market hub in an hour with a freighter to get anything you need. The only reason for EVE to stock a market is the warzone where you can’t just move around in a freighter. In highsec no amount of miners could make a shop alive that sells crystals, ships and such. If it’s not profitable as a free business, it’s even less profitable as an in-corp service.

Now we get to the nastier purpose: exploitation. Marx was right, production creates surplus value and it’s distributed between workers and capital owners very unequally. However his followers failed to create a productive alternative, the socialist economy based on common ownership created poverty. How can he be right and yet his solution wrong? Because exploitation isn’t a problem in the system, it’s the purpose. The reason for it is the dumbness and laziness of most people. They fail to properly utilize their assets, so if they are left on their own devices, they make very inefficient production. The perfect example is the guy with the credit card loan. Everyone knows that credit card loans are very expensive and they aren’t big enough to be used on big, productive purchases. Everyone with a credit card loan is making a dumb mistake just because he can’t wait to buy something that he probably doesn’t need anyway until he can afford it.

The purpose of both corporations and government is to protect the morons and slackers from themselves, taking away their freedom and force them to do something productive. Since the worker is perpetually broke and lacks perspective, his best option is to just do as told and settle with a little part of the surplus value. Similarly he is forced to pay tax and various mandatory insurances to protect himself from his inability to save the same money for his elderly age and his medical cost. Of course both kind of management have costs and the managers also take as much as they can, so the worker/taxpayer ends up much worse than he would if he would manage the resources himself, hence the name exploitation.

What Marx and his followers failed to notice is that the exploited workers are unlike to themselves (Marx had university degree unlike the blue collars he fought for) and unable to manage themselves. With as much simplification as possible, capitalism is like a pig farm. The pigs are controlled, locked in and finally slain. Yet the pigs are still much better off than wild boars, have much better health and much less stress and even higher life expectancy despite the “finally slain” part. Would the pigs be liberated from the farm, most of them would starve to death soon since one acre of properly handled farmland creates much more biomass than an acre of grazing land or foraging forest, but the pigs can’t operate a farm and limited to grazing and foraging.

Such exploiting corporations cannot exist in most games as the game developers take on the task and create quest givers as “business owners” . They hire the player and pay him for a simple task. This is done exactly because most of them would fail to act for themselves. Theoretically EVE Online could be a great place for exploitive corporations where the smart businessmen creates hourly paid jobs to dumb players who wouldn’t have to bother about production methods or save money to buy tools, just do as told and get paid.

I see lot of EVE miners working in an obviously suboptimal way (if you have no Orca boost, you are doing it wrong, if you warp to the station with the barge instead of filling an Orca or Freighter, you are doing it wrong…), so they – like the pigs – could benefit from being exploited. Even if 90% of the extra yield coming from the boosts and the no warps would go to the capitalist, they would still be better off. Such systems would be great content creators and places for new players to start and get involved.

Yet in EVE there aren’t any successful highsec business corporations besides Red Frog and clones, but they are much rather Franchise systems than real corps, every pilot does the job alone, just share the marketing. The reason of the lack of industrial corporations is the wardec and awox systems. The costs of protecting your corporation simply cannot be gained from exploiting dumb and lazy players. You are better off mining with your own alts in an NPC corp out of sight than getting employees and exploiting them. The income coming from one extra casual miner working for you is much less than the risk he poses as awoxer and the attention he can get for a wardeccer.

I think neither the ability to shoot corpmates nor the highsec wardecs give nothing to EVE but take a lot away. They take away the creation of corporations where a content creating businessmen keep lot of dumb, average players busy. Now everyone has to create his content, and most are unable to. Why do wardecs and awox give nothing to the game? Exactly because there is no one left to wardec or awox: there are no real corporations to attack, you can only find some idiots who formed a dysfunctional social corp where they do nothing but chat. They will simply stay docked for a week and their impoverished state means that an awoxer or wardeccer will have much less kills than a suicide ganker. Before you’d ask, I point out the fundamental difference between wardec/awox and suicide ganking. The first can be avoided by simply not being in a real player corp, while the second affects everyone regardless of corp status. Removing wardecs/awoxes wouldn’t make EVE safer or “less harsh” as any somewhat competent player is already completely safe from them. They are only affecting newbie players who don’t know that EVE isn’t WoW, where being in a guild have benefits or at worst neutral. I think only corps who own space assets should be open to wardecs so players wouldn’t be worse off just for being in a group. This would allow experienced players to mesh with newbies and dumb players, exploit them financially while teaching them some basic stuff.



Another soul saved from the tankless gank-food state:

26 comments:

Anonymous said...

Mining != Industrial

Many people conflate the two, as there can be overlap, especially if you mine for your building (Because, yeah, that is a thing for some people)

Corps running large production chains, copy farms etc have no need for mining, unless their members enjoy doing it (Don't ask, some people just like chilling in a belt with some friends and a beer). The ISK generated from these "hanging out in a belt chilling on voice" sessions is inconsequential, and is largely done as a "Well, its better than sitting in a station, and we can do trading from space while we wait for our building to finish".

Most of the large scale industrial corps I know of have members who basically do wtf they want outside of their paid function within the building chain, as manufacturing is second only to trade in terms of AFKness, so yes, you will see them hanging out mining, or semi-doing missions, and then assume that is what they do for their isk, when in reality their ISK generation comes from the POSes they run.

maxim said...

I resent the pig metaphor, because it strikes me as decidedly fascist.

In terms of everything else, you seem to be right on the money, though.

I started my Eve character with the intent to figure out a way to run a truly industrial corp despite all this. But, two weeks in, i don't even see a reason for myself to join any non-NPC corp as an industrial. There just isn't any useful cooperation they can provide that isn't already provided by eve-central and the like.

IRL this problem was solved when RL equivalents of "military corps" started to realise that they need the industry to support the wars, and actually began protecting industrialists from RL equivalents of awoxers and wardeccers.

In Eve, you can get all the industry you need just by securing access to highsec space. Which you don't need industrialists for.

In highsec space itself, CONCORD does the protection thing, but since it protects everyone indiscriminately, regardless of their worth for the war effort, there is no real mass stimulus to build stronger industrial systems.

Lucas Kell said...

Where do you come up with this stuff?
The whole articles falls down on a single point. There are industrial corporations.
I'm in one for starters.
In fact technically I'm in two, since one of my spy alts is currently in one as part of his "reputation building". Both run mining, manufacture shipping and sale of their goods as a primary venture, with combat ships one for defense (and CTAs in the case of my main).

And there are hundreds of others. I'd be surprised if nobody else pointed that out in these comments.

Seriously, you need to actually research before you make hugely incorrect statements like this, then base an entire article off of them.

Von Keigai said...

if you warp to the station with the barge instead of filling an Orca or Freighter, you are doing it wrong

I mine in a retriever. I can take 26000m^3 of ice to a station in about a minute. Then I mine for about 14 minutes, filling the hold again. So I lose perhaps 6% of my yield by moving my ice myself. However, by keeping ownership over the ice I mine, I get full profit from it without any bookkeeping.

A Mack can take 35000m^3 in the same time. So he is losing 4% or so.

Contrast what you want: I jetcan my ice to a corp freighter sitting nearby. Now I can mine full-tilt, getting 6% more. On the other hand, I want to get paid for it, full value, and who is doing that? A full retriever of ice is worth perhaps 5m ISK. 6% of that is 300000 ISK. If we split the surplus, it is 150000 ISK. Is it worth 150000 ISK to you to keep careful track of all ice that I give you? Perhaps you pay per jetcan? So you are making corp payments every 14 minutes to me? What if you miss one? What if I say you missed one? What if I look at the prices in Jita and see that you are paying buy price and not sell, and I want sell?

It seems to me that the extra work of paying for each jetcan is not worth the time. If it takes you 20 seconds to pay me each time, you're earning at a rate of 27m per hour. This seems just barely worthwhile. Does anyone actually run a mining corp that way?

Now, if CCP wanted to support corp miners, here is a thing they could implement. Automatic pay-to-take from jetcans. Create a jetcan variant which is owned only by the player, not his corp. Allow anyone to take from it legally, but only as a transaction that includes a payment to the player for each item taken (presumably using the mouse-over price). Allow each character to set a default jetcanning method per ship type.

Gevlon said...

@Von Keigai: workers are hourly paid.

@Lucas: the fact that you have a spy in it proves that the corp is a failure.

Also, 5 punks mining together isn't a SUCCESSFUL corp, it's just 5 punks mining together. Red Frog is successful, you conract to Red Frog and not public.

Where is Lonetrek Mining Co where CFC buys minerals from without broker fee and closer to Deklein?

Where is the Amarrian LP farm Co?

Where is "Capital BPO Research Co"?

Anonymous said...

I run the minnie LP farm. I optimised running fw missions for ridiculous isk/hr and created 20 or so characters with the standings and the skills to do it. These were then transferred to people who then ran the missions within my corp selling the LP to me at a fixed rate. Replacement hulls and so forth were provided on corp contracts, characters not being used were transferred on to new workers and a great many billions were made. While someone can decide to get into fw it takes time, practice and character skills to run it perfectly. People make far more money skipping to the end where fw really pays off than grinding themselves there and, like the miner giving the orca most his extra ore, are happy to pay for the opportunity to make more.

Lucas Kell said...

"the fact that you have a spy in it proves that the corp is a failure."
Well no, not really, and even if it did it's beside the point, it's still an industry corp. And since I'm not spying on THAT corp, it's not a failure at all. I'm there as a regular member, to ensure I have a healthy employment history when he moves to his role as a spy.

"Also, 5 punks mining together isn't a SUCCESSFUL corp, it's just 5 punks mining together. Red Frog is successful, you conract to Red Frog and not public."
Who said anything about 5 punks mining? We (my mains corp) mine to fill in minerals that would otherwise be a pain in the ass to ship, and to chill out and chat, and we run manufacture and trade. We're 214 in member count, not even counting high sec trade and shipping alts.

"Where is Lonetrek Mining Co where CFC buys minerals from without broker fee and closer to Deklein?"
Corps within the CFC do this. Why pay money to an external entity, when you can pay money to an internal entity in exactly the same way, and keep the wealth in the family.

"Where is the Amarrian LP farm Co?"
LP is from missioning, not industry.

"Where is "Capital BPO Research Co"?"
It's called ARLAB, and they are pretty awesome at it.

Anonymous said...

So because you dont know of Capital BPO Research Co, it means they do not exist?

How do you think people get their capital bpos? You think people do it all themselves?

Gevlon said...

Yes, people research capital BPOs.

@Lucas, are you talking about nullsec industry corp? That exists of course, because of lack of local competition (I can't go trade in VFK)

Anonymous said...

@Gevlon

So given the fact that industrial corp members have commented here, you still claim there are no industrial corps? How should we interpret your comments?

Von Keigai said...

workers are hourly paid.

What, you mean IRL? Well, yes. But not all are -- many people work on a piecework basis.

In any case, the point of paying wages is that you are providing capital that the worker absolutely cannot provide on his own. If he could, then he could save up, buy his own tools, and work on his own behalf.

For example, there is a job in Detroit making cars, where you screw on subassembly #23 using bolts #201, #214, and #127, as a car rolls by you on an assembly line. You can get paid a nice hourly wage for that by Ford. But you cannot get paid anything for screwing on subassemblies outside of a factory, because the value-add for bolt-screwing is, though large for the time it takes, only something that takes a tiny amount of time. Being in the factory is the only way that you are presented with 120 subassemblies per hour, each and every hour.

How much does a car factory cost, compared to the hourly wage that you might save to build your own? If you can save $10/hour, and car factories cost $100m, it would require 10 million hours of work to save up and buy one.

Or another example, you work in a McDonalds. Here you have access not only to lots of capital (the building, fry machines, stoves, drink machines, etc), but also the upstream factory outputs (premade burgers, etc.). Not to mention the corporate brand.

How much does a small restaurant cost? Maybe only a few hundred thousand dollars. Call it $500000. How many hours of saving at $10/hour would it take to get one? 50000 hours of work -- that is just 17 years worth of saving. A small entrepreneur can set up a hamburger restaurant, but not easily.

Contrast mining ice. What capital does a corp supply? An orca. A freighter. Well, these things are available for about 1.5b ISK. You can earn 20m/hour at least mining ice. So, you'd have to work for 75 hours to supply them yourself.

The "problem" here is not so much that profit is hit by awoxers or wardecs, although these are indeed problems. It is that it is so easy to go into business on one's own, that there is essentially infinite competition. And thus almost no profit.

Indeed, where I mine ice, I get free Orca boosts from a generous player. He gives it away.

If you want to be an entrepreneur in EVE, you should look for production activities that use capital requiring many months, at least, of hard work to save for. Mining is not one of them. If we arbitrarily choose 6 months as the length of time that average players are too slackerish to save for, and we assume a hard-working non-slacker would-be entrepreneur works 4 hours per day, earning 20m per hour each and every hour, then the minimum "factory" cost to earn decent pay as a capitalist should be 14.4 billion ISK.

Let us know when you find something like that.

Gevlon said...

TEST calls itself a nullsec alliance. It doesn't make it true.

To have an industrial corp that actually more than a bunch of miners chatting while mining inefficiently, you need meaningful impact on at least a segment of EVE economy.

@Von Keigai: partially you are true, everyone is capable of becoming a capitalist as even the tools of a perfect "factory" is available for the "middle class"

But if you look around the belts, you see so many inefficient, solo miners that it hurt. They could benefit from a corp.

maxim said...

@"There are industrial corporations"

What Eve industrial activity (defined as creation of economic value through reprocessing of goods) is easier to do in a corp than outside of it?

Stuff that needs to be done through a POS comes to mind, but that doesn't seem to be a sufficient reason to start a corp.

Lucas Kell said...

@Gevlon
"are you talking about nullsec industry corp? That exists of course, because of lack of local competition (I can't go trade in VFK)"
But your comment was that industry corps don;t exist. It's clear they do.

And even in high sec, where do you think all the items come from? They aren't seeded, and they don;t drop in the volumes you get them. They are manufactured, and a lot by industry groups working together. Small groups, yes but groups none the less.

"But if you look around the belts, you see so many inefficient, solo miners that it hurt. They could benefit from a corp."
Sure, but there's a lot of miners who are just tryign to generate a bit of isk, don;t want to tie themselvesto a corp and just want to afk mine a bit of isk. those are who you normally see. There are plent of mining groups from corps.
If you look outside high sec, you see LOTS of groups. 20+ miners sometimes with boost support, all working together.

Samus said...

Couldn't you go the other direction? You could allow player corporations to purchase the same protection from wardec as NPC corporations, for a monthly fee, but the agreement would bar them from making any wardec themselves.

Anonymous said...

What Von Kegai is trying to say is that there is no profit to be made in activities with low barriers to entry. No one really starts a mining corp because anyone can start a mining corp. An Orca costs how much? 800K ISK? Pay that, get an alt and anyone is in the mining business, working for themselves.

Go one step up the production ladder and look at the refining business. This is where you put up local buy orders, haul the ore and refine it at a station where you have perfect refining. You really need a freighter and more importantly, perfect refining. I have run such a business for years and the profit margins vary from 5-20% based on competition in the buy orders for the area you are working in. But that margin exists because there are significant barriers to entry in comparison to mining. The first is the freighter which costs around 1.2B, a significant barrier to new players. The second barrier to pull this business off efficiently is the perfect refining. You often need it with multiple factions unless you like making a lot of freighter trips. That takes a lot of time running missions.

The capital BPO research business is the same. It takes a significant amount of capital and the willingness to commit to long research times in high sec. Those can be high barriers to entry for a lot of experienced players, much less new ones.

Anonymous said...

actually when an orca boost becomes worth it over just another hulk depends on how many miners total you have, so thats wrong
if you only have 2 toons, using one of them for an orca is a waste (just concentrating on yield for a second, not anything else) as it won't double the yield of the one remaining miner

maxim said...

@Lucas Kell

<< And even in high sec, where do you think all the items come from? They aren't seeded, and they don;t drop in the volumes you get them. They are manufactured, and a lot by industry groups working together. Small groups, yes but groups none the less. >>

Small groups working together does not an industry make.
Industry is, first and foremost, economies of scale. Then it is optimisations, automations and contracts - all contributing to economies of scale.

Eve production process doesn't lend itself well to economies of scale. In fact, Red Frog have covered the only activity that truly benefits from having massive numbers - hauling.

croda said...

I wonder if CCP completed the work on "shares" ( I.e. the shares one can own in a cop) then perhaps things would be different.

Allowing a share of profits would provide an incentive to work as a team and provide an alternative to diverting materials to sell on the market.

Lucas Kell said...

@maxim:
"Eve production process doesn't lend itself well to economies of scale. In fact, Red Frog have covered the only activity that truly benefits from having massive numbers - hauling."
That's just wrong, plain and simple.
Firstly, Red Frog (and PushX, there's not just one hauling corp) have to use out of corp alts to haul, so as a corporation, they don't really work. They are more a single point of contracting for a group of individual haulers. You contract to red frog, a random person picks the order, moves it to their hauler alt and hauls it. The corp itself has nothing to do with it, other than providing that one source of contracts.

Secondly, economies of scale work easily in other industry corps. A corp that does a lot of BPO reasearch benefits from multiple character as each character can run at most 11 science jobs at any one time. So that's ME reseach, PE research, Invention or Copying. When you need to run hundreds of those, it's difficult to do the whole lot with alts. Then when you think about Mining, a single hauler can cater for 30 miners easily. A single orca can boost for a fleet of 255 people.
Then you need to manufacture, again with 11 jobs per character limiting you, and haul to markets, and sell.
Doing everything solo means you can't do things simultaneously, and you need to run a lot of accounts. Having a corp with individual wings taking care of just their job makes you vastly more efficient. The better industry corps do just that.

You have to think though, why do we hear about red frog, but not the industry corps supplying vast amounts of items on the market?
The reason is, for red frog, you have to contract to red frog, so you know their name. When you buy items, you are simply buying on the market, not reading into who you are buying from. It's like when you buy an xbox, you know about Microsoft, since you are buying their product. But it's made in a factory by a third party from parts manufactured from third parties, but you probably couldn't name a single one off the top of your head (unless you are involved in making xboxes :D).

Gevlon said...

@Lucas: in case of your research corp, what does the CORP do? I mean I research BPOs myself and see no reason to corp up with other researchers. Could you tell me one?

Ironically I say the same to you what you told me about the ganker corp: what is the benefit for a ganker to join when he can gank on his own without my rules?

Anonymous said...

there is no need for efficient mining or industy

you want hardcore mining?
really hardcore mining?

wipe ALL base mats and other "means to get them" in an instant. ramp up material costs. so that grinding up for a small T1 module would take years.

swg grind, anyone? Or korea mmos, anyone? full of rnd and grind. one of my last was Aion. full of grind until the patches, where they introduced token gear. Balaur materials *sigh* did even reroll cleric to grind them better. to have 1. a kill:resource ratio on elite 2. the best. Ore and other "gathering" was done on the fastest class+buffs. It's an horror and people do it and people will make spreadsheets and keep track so they know the best class for whatever part of the game.
To make a point here. If you want that kind of competition on resources ... build in ridiculous amounts of bill-of-mats to craft anything.
Not in eve tho. people will figure out how to multibox 100k clients and swarm afk every belt in EVE.

it all falls into "why is node grind boring" categorie. Firefall had an interessting thing going on. you setup a resource grinding station that you will have to defend after activating it. It's like you deploy a "BeltGatherer" in EVE that will spawn endless waves of rats that you will have to kill until the unit is destroyed or done.


when something isn't there like dedicated industry corps or mining corps .. most likley it is not needed.

Lucas Kell said...

@Gevlon:
"in case of your research corp, what does the CORP do? I mean I research BPOs myself and see no reason to corp up with other researchers. Could you tell me one?"
Shared POS insfrastructure. Sure, you could pay fuel costs for just you, but a corp can service multiple people with a single POS, thus reducing fuel bills. A solo player would not be able to defend his POS also. He would be forced to remove it or lose it if it was attacked. A corp could protect it.
Besides, most corps wouldn't do only a single function. Chances are if you are running research, you are also running manufacture and trade. There's no way a single individual could run everything solo as efficiently as a corp with divided responsibilities.

"Ironically I say the same to you what you told me about the ganker corp: what is the benefit for a ganker to join when he can gank on his own without my rules?"
It's not the same at all. A ganker joining your corp gains no shared resource. He has to do EXACTLY the same as he does solo at EXACTLY the same cost. A solo miner choosing to join a manufacturing corp gets protection, boosts, hauling. All things he would need to build a second, third, fourth account to do, would have to find capital to pay for himself, and would struggle to do simultaneously.

Anonymous said...

"@Lucas: in case of your research corp, what does the CORP do? I mean I research BPOs myself and see no reason to corp up with other researchers. Could you tell me one?"

yep, your 2 month research jobs are one thing , but if you ever look into invention, especially modules, you'll realise that they only take little time. 1hour 15min to be precise.
even with a zillion accounts, you just can't use the lab 24/7, as you'll have to work and sleep, and eat, and and and.

here comes the benefit of many individual players.

there are industrial corps that do that. with many individuals. they have specialized software administering when to do which job, to maximize effectivnes. but i am sure you used google before you wrote this post and therefore already know all of which i just wrote.

Anonymous said...

The bottleneck for T2 module production isn't invention nor production slots. It's the copy slots needed to churn out BPCs in sufficient quantity to keep x # of production slots running.

maxim said...

So

Eve industrial corps take advantage of the following types of scaling:

- bureaucracy scaling (single outlet for contracts with external world is an important thing)
- specialisation (i do research, you do manufacturing, gogo)
- PoS costs split over more people
- Mining optimisation with orcas and haulers

PoS and bureaucracy scaling seem to be the only things that require an actual in-game corp (as opposed to really long friendlist).

It is the same IRL, though. The big difference is that fixed capital costs (like PoS) tend to be larger, book-keeping and contracts - more complex and involved and profit margins generally smaller.

The interesting bit here, though, is that increase of capital management and book-keeping and reduction in profit margins would likely make Eve a less fun game.

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