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I focus almost exclusively on PvP, whether solo, small gang, or large bloc warfare. In the past, I've been a miner, mission runner, and faction warfare jockey. I'm particularly interested in helping high-sec players get into 0.0 combat.

Tuesday, April 26, 2016

A Ship in Every Citadel

Sure, the title of this post wasn't the tagline of Empress Catiz' coronation celebration, but given the timing between the conclusion of the Amarr Succession Trials and the release of the Citadel expansion, it might as well have been. If you're curious about the lore implications of Catiz Tash-Murkon's ascension to the throne, check out the CZ article by Tarek Raimo. It's very good and informative.

Citadels are coming in about half a day, and with them are coming widespread capital rebalances. What was two is becoming three, with fighter damage and logistics being split up into Carriers and Force Auxiliaries respectively. I still hate that awful name, by the way. It's terrible and doesn't really apply. In my mind, auxiliaries have one of two meanings: either allied forces you don't rely upon, but use to "mop up" or a reserve force you keep until you identify where along a battle line you need some help. They should have called them triage and been done with it.

But, I digress. I won't waste your time talking about the detailed effects these changes will have on capital warfare, more because I honestly don't know than because of personal restraint. I'm not a very experienced capital pilot, and couldn't say how it'll affect the meta. I do predict that the new capital modules will provide some local repping power to offset the danger presented by the new doomsday weapons, and I generally expect more caps to die in engagements than in the past. But I'm not putting any money on it.

Upon first glance, it may not appear as if there's a lot in the Citadel expansion that directly affects subcap PvP. After all, we aren't getting ship rebalances, new ships (which, honestly, we don't really need), or the desperately warranted assault frigate rebalance we've all been asking for. And, generally, I get it. Subcaps have gotten a lot of attention, and it's time to let them sit for a while until all of the ramifications of the whirlwind of changes settles down.

But it'd be a mistake to believe this expansion won't affect subcap pilots.


Oddly, I'm not as fixated on citadels as I perhaps should. I certainly see the way they'll fundamentally change all areas of space - particularly NPC null-sec, which can now be effectively "claimed" by alliances setting up their own citadels. Venal and Outer Ring, in particular, are going to change in incredibly dramatic ways. Both regions have minimal NPC stations, leaving wide tracts without any docking structures, markets, or repair facilities. I suspect those two regions will become densely populated starting tomorrow, when citadels become a thing. A sort of NPC homesteading, if you will.

And if it bumps up the density, we'll see PvPers drawn to the area to prey on the whaling boats and LP farmers in the area. All of which is good for an ecosystem in those regions.

But while citadels are going to allow groups to claim space without owning the TCU, to me, that's not the key change coming on Wednesday.  Rather, it's the bump up in transaction tax and broker fees.

Consider... every trade in Eve is going to get 2% more expensive. You're going to see buy and sell orders for each item widen a little bit more. The cost of buying each ship is gong to go up - not only because of the price you pay for a sell order, but because when you go to sell it again, you're not going to be getting as much, and will have to may an increased transaction tax.

Sure, for a single trade, that's small potatoes, but it adds up. There's a reason increases to taxes reduce the velocity of money in RL economies - the cost of each transaction bleeds a little more out of the system.

Consider... you buy a ship for 50 mil and fit it out for an additional 25 mil. That 75 mil is your base cost. Miraculously, you don't lose it, but your fleet doctrine changes and you ship it back to Jita to sell again. Traders will want to cover their transaction fees while still earning a sufficient margin, so that original 75 mil represented about 71.4 mil in profit for the trader and 3.6 mil in transaction and broker fees.

Let's say it's a competitive market, and the trader was happy with only 1 mil in profit for the ship and fittings combined. You're unlikely to be able to sell it for more than 70.4 million. But, the buy orders you sell to involved player incurring a cost to set it up (broker fees). The buyer is going to keep that in mind, because that's a sink cost he has to pay in order to get the item. If he thinks he can still sell all of it for 75 million, he's paying two sets of transaction and broker fees - one to set up the buy order and one to sell it. That's another 2%.

So, the buyer is unlikely to pay more than 69 mil for it... if he wants to break even. let's say he wants a million in profit as well. Now we're down to 68 mil of "value".  So, you buy it at 75 million, and can sell it at 68 million, leaving 1 mil in profit for both the buyer and seller, and about 5 mil in transaction taxes and broker fees.

The cost of buying and selling that ship was 9% of its value. For only 1 mil of profit for the buyer and seller each. If they want 2 mil in profit on 75 mil of capital, we're looking at a 12% cost.

That 5 mil in transaction costs - compared to 1.83 mil today - is going to come out of the pockets of those who use the ships as a cost of ownership. Particularly those who don't have the time to wait for buy/sell orders to resolve. And that, most definitely, will affect the costs of PvP.

Unless, of course, citadels truly displace NPC stations as the trade hubs. Based on what I'm hearing from traders, manufacturers, and those who hold large amounts of assets, those communities don't have any desire or intention of shifting away from NPC stations, even at the final rate of 5% that CCP will settle on once full citadel functionality comes out.

Folks right now seem to be clearing out their hangars of extra ships in advance of the increased taxes/fees coming tomorrow. Obviously, trading behavior is being adapting to these upcoming changes. We'll have to see how much, and whether it has a large enough effect to influence player behavior.

We're going to see PvE behavior adapt accordingly, too. Between World War Bee and citadels, we're going to see a significant shift in the densities of various regions, and with the relocation of the fish will come the relocation of the sharks. I don't think the PvP landscape will be the same post-April 27.  It should be interesting!


P.S. And, yes, I took a bath on PLEX prices. I expected the effect to be short-term due to citadels, but I see now how misguided I was! I should have listened to Gevlon...

P.P.S. Yes, I do realize I just said that.

6 comments:

  1. Bear in mind, the brokerage and transaction fees apply at every link in the value chain, ore, minerals, PI, reaction material, components, not just finished goods. Eve has a lot of producers who specialize in one link of the chain and sell their product at a trade hub where a specialist in the next link can buy it. In the real world governments support this business model using a value add tax but CCP has created a system where the fees are nested - at each link you are taxed on total value, not just added value. Even at the lower rate announced at Fanfest this will force the lower tiers to use tax free citadels. I do expect that finished goods will continue to trade in the traditional hubs, people will pay a premium for the convenience of one-stop shopping.

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    Replies
    1. It will all depend on one thing important -- visibility.

      If I can't see your orders because I can't (or may not be able to) access your Citadel, I'll carry on shopping at Old Rens. If others can see my orders but not yours, I'll continue selling from Old Rens.

      Even if all orders are visible to everyone, people will only need to be burned once by access rights to avoid remote buying from that place ever again. That means traveling to the Citadel first, and since a lot of traders make their money from people who won't even travel one jump to get a better deal, I don't see Citadels as big an impact as some fear.

      The extra fees will be an ISK sink for sure -- but so were the fee changes in the big Industry update, and New Eden didn't end then either...

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  2. Way back at the top, your dissatisfaction with the term 'Force Auxiliares.' There's precedence for the use of 'auxiliaries' and it comes from the Roman Empire initially. Roman auxiliaries were specialists in specific weaponry or tactics and were often as large, collectively, as the legionary component of an army. More recently, the British Empire made use of auxiliaries in a similar fashion. The term does have connotations as you have stated, but I wanted to point out it wasn't the only one.

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  3. (Stares at keyboard)
    ...
    ...
    I posted a *lot* on the initial NPC tax increase thread. Probably 80-90% of all my posts on the forums ever are on that thread. It's hard not to feel disheartened that CCP ignored a lot of that effort and thought, and have doubled down on a change which I feel to be particularly harmful. The change, which unlike some others, has few if any obvious upsides and a long term significant downside.

    I stated elsewhere that I was feeling burnt by CCP: I think the absence of any dialogue over these changes is a significant part of that.

    If you're going to touch the most fundamental parts of the game, surely you'd want to *talk* to people about it?



    Maybe I'm just not someone CCP wants playing any more?


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