Let me begin my apologizing for a second article about PLEX in such a short period of time. This may not be the final word on PLEX from the community, but it is the final word from me.
My first article dealing with PLEX may or may not have done a reasonable job of explaining the drivers of PLEX prices. Feedback was heavy. Some positive, some negative, and of course the usual dose of shite from some of the interweb’s bravest. I was generally spot on in terms of the supply and demand analysis, however I am going to admit I fumbled in making recommendations for CCP to do something about the price of PLEX. It wasn’t that those recommendation might not be effective at bringing down the price or holding it around its current level. The bigger question is why would CCP want to make a change that forces prices lower? After looking at the issue from a different angle, I have come to the conclusion :spoiler: that they wouldn’t. Not yet anyway. Not when you take into consideration why CCP introduced PLEX in the first place. For that bit of insight, I want to thank NoizyGamer from The Nosy Gamer blog. He wrote a legit response to my article that really caused me to rethink some of what I had previously written.
This follow-up article is intended to clarify some things from the first while ending with an entirely different conclusion based on this new line of thinking. In other words, I’m going to do something you don’t see many of the EVE blowhards do very often: admit where I think I went wrong. Now I’m pretty sure some of those anonymous trolls in the comment section think I went wrong as soon as my first keystroke hit the screen. Maybe that’s true, but as the great Shaka Zulu once said. “Akukho fucks ezinikezwe.”
First, I don’t personally care where the price of PLEX goes, up or down. Just because I wrote the article doesn’t mean I need CCP handouts to keep playing. I pay for more than enough accounts with yearly subscriptions and several more with PLEX because I choose to. I could PLEX all of my accounts, but I don’t need to. I could pay cash for all of my accounts, but I don’t need to. Regardless of where the price of PLEX goes, my game remains unaffected. There is simply no need to discount or deride an argument because the writer may or may not have a personal stake in the game. Bias exists, on both sides, but that doesn’t mean the subject isn’t worthy of discussion. The price of PLEX affects many players of the game, and a higher price disproportionately affects certain players more than others. Not just slackers, but more notably newer players who have not developed the earning power required to participate at such high levels. That makes it worthy of discussion as much as any other topic associated with the serious business of internet spaceships.
Second, my view is that PLEX is priced exactly where it should be. It was priced right when it was at 300 million and 500 million and 700 million. And it will be priced absolutely right if it hits 1 billion. Why? Because that is what the market says the price should be, and the market, especially for PLEX, is highly efficient. The price may not be right for you as an individual, but in an aggregate market sense, more than enough players are willing and able to pay the price the market has set. So for those who thought I was saying something different, even if I did say something different, I hope that clears up my view on the price.
Third, the purpose of the article was not to encourage CCP to artificially keep the price of PLEX from taking its natural course. Yes, I was advocating for CCP to do something, but that “something” was to stop creating excess demand for no good reason. Now they may have excellent reasons why they create new drivers of demand, which I will get to later. But under no circumstances was I advocating for them to artificially hold back inflation just for the sake of keeping PLEX prices low.
Fourth (and final), PLEX isn’t just your run of the mill game item that is exclusively subject to the mechanics and market forces of the game. It isn’t Technetium or Tritanium or Drone Alloys. The scarcity or abundance of PLEX isn’t a factor of normal game mechanics. I’m talking about the supply side here, not the ability of players to buy it with ISK. There is an out-of-game element involved that, to the best of my knowledge, makes it entirely different from any other in-game resource. CCP can make changes to other items increasing or decreasing supply or demand and players can do something about both sides through in-game mechanisms. In the case of PLEX, an out of game action must take place to increase supply. That makes discussions of PLEX different from discussions about any other in-game item.
In my original article, I laid the blame for increased demand for PLEX, and thus the rate of of inflation, at the feet of CCP. As if they had no good reason to keep adding new uses for PLEX. While I stick by the premise that CCP’s actions do indeed have a direct influence on demand, I screwed up by not taking into consideration what their goal was when they introduced PLEX in the first place. Their reasoning is important because it is probably a good indication of why they may not be too concerned with the price trend and we should all expect it to continue higher over time.
I began my analysis from a flawed premise: that PLEX were just a simple replacement for EVE GameTime Codes (ETC) and the new uses added over time were nothing more than CCP adding new “features” to the item. PLEX were in fact a replacement, or extention of the ETC, which has existed for years, but its base purpose was part of a much more elaborate plan. A plan that puts the users of PLEX in a secondary position behind the larger goal. More on that after this little history lesson on the introduction of PLEX.
*** Skip this paragraph if you don’t care when PLEX were introduced *** Years before the advent of PLEX, ETCs could be traded for ISK. However, they couldn’t be contracted or bought and sold on the in-game market; you had to find a buyer through the forums and then go through CCP’s process for trading them. That process was cumbersome and created a barrier to entry Despite that fact, according to CCP at the time, about 30,000 “players” were using it. PLEX were first introduced in a devblog in November 2008. Initially, ETCs purchased through authorized re-sellers could be converted into PLEX. These PLEX could then be contracted or sold on the market and converted into gametime. Nothing more. Then in February 2009, CCP began to sell PLEX directly to the players via its website. Easy and safe to acquire, easy and safe to trade. The “modern era” of the PLEX had begun.
So, about this elaborate plan… Prior to the introduction of PLEX, CCP was quite focused on stamping out illegal ISK sellers. It was an issue that they had been struggling with for years. In an April 2008 devblog by GM Grimmi titled, Real Money Trading is Bad, Mmkay?, Grimmi lays out the dangers associated with Real Money Trading (RMT). Not simply the effect on the game’s economy from RMT, but also the security risks that RMT baddies bring with them. As a counter to RMT operators, Grimmi cited ETCs and the ability for players to trade these for ISK:
“While we are determined to root out the evil that are the ISK sellers in EVE, we do realize that there will always be demand for ISK. For those that need more ISK than they can gather via normal game play, there is another way. We are of course talking about the Secure ETC Trading System.”
PLEX were officially introduced in a Nov 2008 devblog by then Executive Producer CCP Oveur titled, I can Resist Anything But Temptation. In it he lists the pros and cons of PLEX system for both the player and the company, but also went on to state the following:
“Giving players a more robust system to exchange game-time for ISK is something we also deem necessary as a result of abuse, exploitation, fraud and hard core companies trying to sell you ISK directly. In the end, this only hurts you the customer and therefore the universe of EVE.
We must continue to battle this and it‘s time for a new strategy. We see what the secure trade of ETCs between players did and we want to investigate ways of making that easier by enable all players to trade amongst themselves directly. If the key to battling RMT is to allow players to casually and securely exchange gametime for ISK, thereby neutralizing RMT companies as a necessary supply, then that is an acceptable, necessary evil.”
Although the player base wasn’t 100% in favor of this at the time, it was something that CCP felt was needed to effectively make illegal RMT uncompetitive. Trading of ETCs was a step in that direction, but the volume and real money to ISK (RM/ISK) conversion rates were not enough. Thus, the introduction of PLEX. The ability to “casually and securely” exchange gametime for ISK directly through CCP and the in-game market system would remove the barrier to entry. It would also expand the degree to which real money could have an effect on the game, but that was a concession they were willing to make.
Following Oveur’s devblog was another from GM Grimmi in August 2009 titled, The Way of the PLEX. Beyond a review of the growth in the PLEX market since its inception, Grimmi spoke further about the connection between PLEX and CCP’s anti-RMT efforts.
“One of the greatest thing about PLEXes is that they offer a way to stamp out unauthorized RMT elements trying to infiltrate the EVE community and hacking players accounts. Buying ISK from unauthorized ISK sellers has serious consequences, as many players have discovered recently when they’ve had the ISK they bought removed as it had come from hacked accounts. It hurts, but not as much as having your account(s) hacked and cleaned out of ISK and assets, I assure you.
The way of the PLEX benefits everyone involved. The very serious effects of the ISK seller rabble on EVE are limited. Your money is channeled into making EVE more awesome rather than ruining it. Players can use their ISK to play the game and save up their hard-earned RL moolah to buy that display card of OMGness they always wanted instead, for example.In short, everybody wins. Everybody, except the account hacking, credit card stealing and macroing ISK sellers, that is. PLEX is a part of a two pronged attack in order to curb RMT in EVE. The second part involves actions such as account banning, item confiscation and ISK reversals. More on that next week when we will report to you on operation ‘Unholy rage’.”
Operation Unholy Rage was a massive purge of more than 18,000 accounts linked to RMT over several months. This wasn’t the last time we heard about CCP’s view on RMT in 2009. The Q3 2009 Quarterly Economic Newsletter also contained commentary from Lead Economist CCP Dr.EyjoG who spoke about the link between PLEX and CCP’s anti-RMT efforts.
Clearly, CCP’s focus from at least early 2008, through the introduction of PLEX and then well into 2009 and beyond, was that RMT was a major concern and PLEX was a significant part of the solution. The fact that PLEX was convertible into gametime was just the beginning. CCP didn’t design PLEX simply for the benefit of players who wanted to “play for play”. It wasn’t a gift to players. It was a means to an end, the demand side an equation. The goal was to make it easy for players to trade real money for gametime and gametime for ISK at high enough volumes and RM/ISK conversion rates so as to make RMT operators uncompetitive.
Looking at the expansion of PLEX uses since the beginning it seems that these have been part of a managed approach to increasing the in-game demand for PLEX. By increasing demand, which resulted in a steep increase in price, this has put upward pressure on the RM/ISK conversion rate.
Given the current price for PLEX in game, CCP has made great headway in generating a conversion rate that is competitive with the illegal ISK sellers. How close are we to parity? The following is a direct excerpt from NoizyGamers rebuttal to my previous article:
“As an example, compare the price of ISK in Jita 4-4 yesterday (16 April) with the median price offered by the sites listed on MMOBUX. The average price of a PLEX was 719 million ISK. That converts to $24.33 USD per billion ISK. Only 41 cents more than the median price of $23.92/billion on MMOBUX. More importantly, that means that half of the 18 ISK sellers are charging more than a player would pay by going through CCP (or purchasing EVE Time Codes from an authorized reseller).”
Besides the chance of having your ISK seized and account suspended or banned, the 41 cent difference to buy 1 billion ISK should be more than enough to discourage players from buying ISK outside of the CCP approved method. I wouldn’t risk the time and effort I’ve put into my accounts to illegally buy ISK at any rate, but you would have to be a full-fledged, card-carrying popsicle to do it at this level. So how much further does CCP need to go to achieve their goal? When is the price high enough that they can begin to allow EVE’s economy to become the primary determinant of price inflation? We’re probably pretty damn close unless the ISK sellers can drop their price further or CCP is seeking to completely vanquish the ISK selling enemy. Complete capitulation will require a much higher price.
To some degree, this is an effort that never ends. It will require constant monitoring and potential adjustments, similar to the work of the EVE Central Bank in monitoring PLEX prices for signs of market manipulation or other issues related to stability. However, that does not mean that we should continue to expect a never-ending cycle of changes that serve to shift demand outward. Not unless CCP goes beyond the goal of defeating RMT and start using it as a method to generate increased income through PLEX sales. Yes, they earn income from it now, but that is a residual of the anti-RMT effort. Helping to push the price higher and higher, even if some players are capable of paying that price, in an effort to encourage more and more supply, would move it into the realm of being a money grab. I’m not saying there is anything wrong with that. They are in fact a for-profit company that deserves to generate as much revenue as the market will allow. However, some players could start looking at it a bit differently at that point.
In the end, my views on the price of PLEX have evolved by seeing PLEX for what it is: a tool to combat RMT. Some players may not buy that concept and think that CCP is just trying to make money by getting their piece of the RMT pie. Conspiracy theorists aren’t always wrong, but I’ll give them the benefit of the doubt.
I have no idea if CCP is simply seeking to discourage illegal ISK purchases or completely drive them out of the EVE market. If it is the former, then we probably shouldn’t see too many more changes to PLEX that shift demand outward. If is is the latter, then we could be going much higher from here. No matter the price, the market will adjust. PLEX hasn’t seen its high water mark, but even in the absence of CCP-inspired demand changes, EVE’s economy continues to grow and player puchasing power continues to increase. As a result, PLEX should continue to move higher over time, albeit at a lower rate than what we’ve seen in the last few years. In the end, not everyone will be able to benefit from using PLEX. As with anything else, not every item is affordable to every player.
– Dirk MacGirk
