Learn how the economy works with EVE Online; A game where you can make money

EVE Online is a massively multiplayer online role-playing game (MMORPG) known for a series of unique features:

BingMag.com Learn how the economy works with EVE Online; A game where you can make money

EVE Online is a massively multiplayer online role-playing game (MMORPG) known for a series of unique features:

  • Big space battles involving tens of thousands of real players
  • Players who put their hats on their allies after years of friendship
  • The most boring streams you've ever seen on Twitch!

BingMag.com Learn how the economy works with EVE Online; A game where you can make money

However, there's a bigger reason Eve Online is so interesting that it often doesn't get enough attention. This is also the reason for the economic system of the game, which is surprisingly realistic. Almost all in-game items from ammunition to space stations are player-made. When I say player-made, I mean that player-controlled companies extract the raw materials, and other player-controlled companies that do logistics and transport transport these raw materials to the free market where the players can Buy these materials and transport them to space factories where they are turned into usable items. These items are then put back into the open market for a real player to buy.

Part 1: The GDP of an MMO

To understand how vast and varied the scale of industries and economies is in Eve Online, take a look at the flowchart of the jobs people can have in the game:

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Click image for full size.

Yes, some other games like Minecraft - They have a construction system that is as detailed as this game, but no other game has involved as many other players in this process as Eve Online. In the whole process described, not a single non-playable character (NPC) is involved. Every trading partner is a real human being, therefore, in Eve Online platform an economic system has been formed that is surprisingly realistic and interesting.

Unity between players: independent countries of Eve Online

There is a lot to say about Eve Online's crazy capitalist economy, but I want to focus on one aspect in particular. This aspect is also an independent property owned by the player. The entire events of Eve take place in a fictional galaxy called New Eden. At the center of this galaxy is a realm that is controlled by the Empire. ">

This is a relatively safe area for new players, where there are penalties for those who make hostile moves. Of course, this penalty does not prevent the occurrence of hostile moves, but its existence reduces their rate.

The further you go from the center of the map, the more you enter the ownerless territories. In these realms, there are no institutions to provide for your needs, but anyone can claim to be the owner of these areas. This means that a group of players can form a union and essentially establish their own nationalities or countries within the game. These countries do not adhere to fixed in-game restrictions.

It should be noted that when I say "in-game country", I don't mean one of those clans where a bunch of people share a chatroom and are identified by a special flag. be. I mean 10,000 players living within a defined border, having an army that the players manage, an industry sector that the players manage, and rules, diplomacy, a capital, a pre-defined government structure, and craziest of all, social security. I'm not joking! Most of these national unions have social security systems in place to ensure that their members have at least the funds to buy a plane to fly. Because the more people who can serve their industries or participate in their defense fleets, the more profitable it is for them. It is Imperium. This group has all the things mentioned before, but it also has its own atmosphere with Donald Trump; A loud, unfiltered, hated/loved leader who does some pretty stupid things when he gets old. But this is a separate issue!

For someone like me who is an economy nerd, the most interesting aspect of the game's economic system is the "monthly economic report". This report was compiled by CCP, the developer of the game, in which all aspects of the economy of Eve Online are described; From the trade balance of different areas to the price list of in-game items.

Yes, we are still talking about a video game!

One of the cool things made possible by this system. Measuring the gross domestic product (GDP) is one of these in-game countries; what in Inside the in-game currency, whether inside its real equivalent in dollars.

I need to remind you that the GDP is generally a measure to measure the strength of the economy of real countries and it is calculated using this formula:

Household Spending + Government Spending + Capital (Investment) + Net Exports

The Imperium has set its borders in this part of the map and the center It is an area called Delve.

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The borders of the little Imperium are similar to the borders of neighboring areas such as Kurias. Querious) overlap, but much of the empire's trade and industry takes place in this area. Aquarius is also where their capital is located. Therefore, in order not to make the discussion too complicated, we will only focus on Aquarius.

If we look at the monthly economic report for January 2019, we will see that all the necessary information is available to determine the GDP figure.

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First let's talk about household expenses. During this time period, the total value of market transactions in Aquarius was 48,600,000,000,000 ISK (ISK is the in-game currency and the unit of this number is a trillion). Additionally, the value of contractual exchanges in this area during this time period was 32,000,000,000,000 ISK.

BingMag.com Learn how the economy works with EVE Online; A game where you can make money

In this game, contracts are generally a way to exchange special and high-value items, but in terms of functionality, they are not very different from exchange in a free market. If we add these two figures together, we arrive at the total household expenditure for this area, in this time period: 90,600,000,000,000 ISK. Let's count In the world of Eve Online, unions are considered government. Unfortunately, this one case cannot be determined by the monthly economic report, because these figures are not published publicly. But do you remember when I said that unions have social security so that all members have a plane to fly? We can estimate how much the Imperium spends on these services.

Every ship destroyed in Eve Online is logged on zkillboard.com. This website has a series of very efficient filter tools that you can use to determine who this ship belonged to and how it was destroyed.

BingMag.com Learn how the economy works with EVE Online; A game where you can make money

Looking at the time period of January 2019, we see that during this period, about 2 trillion sk of Imperium ships were destroyed. Using this figure, we can estimate how much money the Imperium has spent on replacing destroyed ships. Of course, this figure is an estimate, because despite this insurance, the Imperium spends more money on in-game items, and this insurance does not include all the ships that are destroyed. But I am personally ready to accept the figure of 2 trillion SEK for this period of time.

Now we come to the issue of capital. In Eve Online, this figure is approximately equal to normal consumption. Eve Online does not have a fair market for securities. Of course, there are players who buy items in this game that are a long-term investment for them. But buying an item with the intention of long-term investment is no different from a normal exchange. Therefore, this figure is only considered equal to the figure related to household expenses. Net exports. Delo - the main home of the Imperium - imported 5,800,000,000 ores worth of goods and exported 9,200,000,000 ores worth of goods in January 2019. This means that the net export of Aquarius is 3,400,000,000 ISK.

Now that we have all the figures, it is time to calculate the GDP. If we add all these figures together, we will reach the figure of 96,000,000,000,000 ISK.

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Considering that this figure is only for one month of the year, consider it as an average gross profit (looking at the data (the correctness of this assumption is confirmed) and multiplying it by 12, we arrive at this very large figure, which is measured by the "quadrillion" unit:

1,152,000,000,000,000 ISK

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The question here is how much this figure is in real money? ISK currency in the game can be bought in the form of an item called Plex with real money.

BingMag.com Learn how the economy works with EVE Online; A game where you can make money

By purchasing 500 plexes, you can extend the premium account subscription to 30 days and its price is $12. In-game, 500plex is worth about 2 billion ISK. Equating the numbers, the Imperium's gross national profit is about $7 million.

While real money can be used to buy in-game money, in-game money cannot be sold for real money, at least Not with the permission and consent of the game creators. However, when there is a will, there is a way. There are some unofficial and dubious sites that allow Eve Online players to trade in-game money for real money. "Isk" has been sold It is worth significantly less on the black market than official ore, but to be fair, if gross profit were to be determined based on convertible currency, the Imperium's gross profit would drop to three million dollars a year.

Other than that, it should be noted that the Imperium is just one entity in a vast world where hundreds of entities are competing for power and control. So any information given so far is just a small part of the larger and more detailed economy of a video game.

Eevee Online is not for everyone. If the thought of looking at contracts and exchange tables and price volatility charts doesn't appeal to you, there are certainly better ways to spend your time in the online world. But personally, I love any story that is told about Eve Online, because even though it cannot be compared to the national economy of a real country, it has some incredible similarities to the real economy and allows us to understand if the rules were abandoned. And the economy would fall into the hands of internet meme players, what would happen to it!

Part II: bots that increase the inflation rate

Eevee Online has a big problem, and this problem is also seen in other large scale online role-playing games. Here's the problem: leveling, collecting resources, and most importantly, collecting in-game currency is often done by repeating a series of very exhausting and boring tasks.

You know what it is to do repetitive tasks. And boring has a high skill? robot. So maybe the best MMO players in the world are bots. In the previous part, we discussed the monthly economic report of Eve Online, which the game maker publishes every month. There is a section in this report that explains all the ways money is generated and destroyed in the game. The way to generate money is called "Currency Faucet" and the way to destroy money is called "Currency Sink". Bounty Prize) is marked with an arrow in the image below and as you can see, it is far ahead of the other options:

BingMag.com Learn how the economy works with EVE Online; A game where you can make money

You ask what is the salary of winning an award? If one of the players flies his ship towards a group of NPC enemies and kills them, money will be credited to their account every twenty minutes.

There are some players who kill these enemies. Manually get these bounties, but there is an easier solution, and that is to write a program that automatically flies to these enemies, kills them, and moves on to the next group, which is While he is paying attention to other hunters all the time.

The creators of the game have forbidden the use of bots or robots to play the game. Anyone whose wrist is caught while doing this will be banned from the game. But monitoring such work is very difficult and even if one account is banned, one can easily create another account and resume using bots again. By hunting these prize wages, they are printing money 24 hours a day, 365 days a year. If you have the least familiarity with the economy, you know what problem this will lead to: inflation.

Of course, Eve Online also suffers from this problem, and although the problem is not so severe that it affects the gameplay. To screw it up (at least for now), it's more than you'd like to see in your economy. Over the past five years, the inflation rate of the game has increased by 10 percent annually (Note: the article was written in 2019).

By comparison, most modern countries try to keep their inflation rate between 2 and 3 percent. Keep it up.

It is worth pointing out that these sudden drops on the cash supply chart in Eve Online happened due to the closure of the casinos that were managed by the players. Yes, you read that right. Eve Online once had space casinos with a full crew and managed by players. To combat the problem of bots in the game, he tried to prevent the bots from easily identifying the enemy ships that are coming to attack them. This solution will certainly reduce the use of bots, but in the end the competition between bot programmers and game makers will not end so easily. . But let's assume that we are talking about the economy of another macro role-playing game; A game whose creators have not only taken action against the use of bots, but also encourage players to do so and have even taken measures to automate tasks in the game. What would such a game look like?

Let's call this hypothetical game reality Let's name it "Offline" (Reality Offline). In this game, automation has become a big part of the economy, because while bots are not perfect, they are predictable and reliable, and they are much cheaper to use than real players. (Explanation: "offline reality" is a sarcastic reference to our own world and the functioning of the economy in it. The author of the article is humorously comparing the functioning of the economy in the real world to the functioning of the economy in an MMO game).

Let's assume. Let's assume that in this economy, game makers don't allow players to produce their own currency, and control all currency hoses and wells for game currency is in their hands. What should a person whose job is bot programming and now can't sweep currency all day? Maybe in this new situation, these people will turn to producing items that can be sold in the game's Auction House. If this happens, it will have the opposite effect on inflation compared to what we have seen.

Okay, now we come to the educational part of this article. If you clicked on this article just to find out about some cool spaceships, you can skip the rest of the second part of the article and go straight to the third part.

Contrary to what most people think, inflation There is no way to measure the amount of money flowing through the economic system; Inflation is just a way to measure the price of goods. Expensiveness is measured by the Consumer Price Index. To measure the consumer price index, a number of goods and services are selected as representative of a household's standard budget, such as groceries, fuel, electricity, rent, and generally any other goods or services that represent the overall price of things in an economic system. are used.

If the price of these selected goods and services increases, inflation will increase and if this price decreases, inflation will decrease. It is very simple. If you print a lot of money, that means more money will be in people's hands and people can afford to buy goods. Therefore, the demand for goods increases, their prices increase and inflation occurs.

The bots that are printing money by hunting bounty wages in Eve Online have caused this problem. But in "offline reality", you cannot print money. Therefore, you should produce useful goods with your robots. That is why its effect is the opposite. In the "offline reality", the money flowing in the economy has not increased or decreased; Simply because of robots, more useful goods can be produced, goods can be supplied at lower prices, and this leads to lower inflation rates.

We've all heard horror stories about hyperinflation in post-war Venezuela, Zimbabwe and Germany. . The image of people bringing wads of cash to buy a loaf of bread is every economist's nightmare. But what most people don't understand is that a decrease in the inflation rate can be just as bad for the economy as an increase in inflation; Maybe even worse.

This statement doesn't make sense on paper: how can the cheapness of goods be a bad thing? To explain this phenomenon, we must refer to John Maynard Keynes, one of the saints of economics and perhaps the most influential economist in history.

BingMag.com Learn how the economy works with EVE Online; A game where you can make money

In his theories, he noted that the increase in the inflation rate and the decrease in the inflation rate each have their own problems. An increase in the rate of inflation is bad because it makes goods so expensive that most people can no longer afford them. Inflation reduces demand, wastes people's capital, and other countries will not trade with you knowing that your country's currency will depreciate in the future.

Understanding why inflation is bad it's simple. But why is deflation bad? A currency with too much power will discourage people from buying as much as one with too little power. For example, if you have 1000 dollars in your bank account and you can buy a car with it today, if you know that in a year you might be able to buy a house with this money, you will not buy that car. People will keep the strong currency and not spend it, not invest with it, not hire anyone, and generally not do anything with it that will stimulate the economy.

Keynes concluded that of the two options bad as they were increasing inflation was the better option, provided it was kept at a controlled level. That is why today the overdeveloped countries are all trying to increase their inflation rate by 2 to 3 percent annually.

Eyo online is a good economic model to examine these economic theories. It examines the effects of automation and banning automation and how these changing policies affect real-world economic systems. Miniature economic models like Eve Online help us understand how our own economic future will change.

Part 3: Megaprojects

The photo you see belongs to a Titan:

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Titan is the biggest and baddest flyable base ship It is online at Eve. This ship was supposed to be the flagship of the Union fleets. This ship is so powerful that it can single-handedly change the outcome of a space battle between a thousand players and determine the outcome of wars. Virtual resources. Its construction plan will take about a year and a half. But surprisingly, the presence of this ship has become very common in the game world.

When CCP first introduced titans to the game, it was widely believed that only a handful of them would be made. Today, thanks to the economic power of large institutions such as the Imperium (which we introduced in the first part), hundreds of Titans are built every year. There are thousands of titans in the game now, and seeing them on the battlefield doesn't seem very special anymore.

The question is, what effect does building these massive warships have on the economy of the New Eden galaxy?

First of all, I should point out that most titans in Eve Online are built with the personal funds of the players who are supposed to pilot them, not with the funds of a government-affiliated military-industrial complex. However, we can determine what their actual military equivalent is.

Titans were introduced to Eve Online in December 2005. The first Titan was built about a year after this date. At that time, the cost of building a Titan was about 150 billion isk. To understand how staggering this cost is, it is worth noting that this figure was 5% of the gross domestic profit of Ascendant Frontier, the consortium that built the first Titan (they remember Steve Irwin, in which The time had just passed, this titan was named Steve).

Hard data from this time period is difficult to find and I must thank CCP for helping me find the information below. They helped me. The real-world equivalent of building the first Titan would be the United States' 74-class Gerald R. Ford (Gerald R Ford-class Aircraft Carrier) and spend 13 billion dollars for each.

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Yes, this number of ships was worth as much as 74 of the most powerful warships in the modern world. Today, the industrial giants of Eve Online, such as the Imperium, which is the largest player-controlled country, manufacture these giant ships on an industrial scale. Not only are the game factories able to produce many more of these legendary ships, but they are doing so more efficiently, reducing their manufacturing cost to about 50 billion isk per ship.

When you factor in inflation. Considering what we talked about in the second part, we see that the Titan made in 2019 costs one-twentieth of the "real" price of the Titan made in 2006.

BingMag.com Learn how the economy works with EVE Online; A game where you can make money

It should be mentioned that when someone uses the word "real" in the heart of the economy, he means that he has included inflation as well. Therefore, if someone in the media says: "real wage growth", it means wage growth after accounting for inflation.

Now we return to the previous discussion. The super factories of Eve Online represent the United States at the height of World War II; This means that these super factories make military equipment on an unprecedented and uncompetitive scale. Today, considering the falling price of titans and the rapid economic growth of these countries, the cost of building a titan is only 0.0043% of the gross production. Inside is the Imperium. According to the calculations we made in the first part, the Imperium's GDP per year is 1,152,000,000,000,000 Isek. Therefore, building a Titan in 2019 is equivalent to a budget of 900 million dollars for the US military. This figure is also high, but it is not even comparable to the cost of ten years ago.

This great improvement in the capacity of factory production is a mirror for our growing world. A hundred years ago, a ship like the Titanic was considered an industrial marvel, on a scale the world had never seen before. But today there are thousands of ships floating in our oceans that Titanic - if it still existed - would look like a phallic object. that in-game countries like the Imperium produce every year, the cost of in-game military equipment is huge. So on paper the big countries in the game are very bloodthirsty, but we mustn't forget that at the end of the day Eve Online is a video game about blowing up spaceships in epic battles that make headlines because of the high cost of its battles. So We can sympathize with them on this high military cost.

BingMag.com Learn how the economy works with EVE Online; A game where you can make money

However, there is an in-game item. It has such a huge scale that the most powerful countries in Eve Online have not even thought of building it. The photo you see below is a space station called Upwell Palatine Keepstar. In this photo, three Titans are placed to show the scale of size. The Death Star, Star Wars' planet-destroying space station, is online on Eve. The developers introduced this item to the game practically as a joke, because the resources required to make it are insane.

The cheaper and more reasonable equivalent of this item, the regular Capestar, exists in the game, and there are several of them. They are scattered throughout the galaxy and serve as the capitals of the most developed countries in the game. Even the construction of these ordinary Capstars is much heavier compared to the aforementioned Titans, but the Apollo Palatine Capaster costs so much that it will be the most expensive virtual item in the world if it is ever made.

It should be noted that the expensive reason Being an item does not mean that a rare item is used in its construction or that it has a high power (Stat) like other very valuable items in games. The reason this item is valuable is simply because of the incredible amount of industrial labor it takes to make it. The raw materials needed to build this huge space structure are incredible. Even using the most efficient and high-level resource mining ship in the game, it would take a million hours of time divided between real players to mine the resources needed for this project. Only after this the construction process will start!

If you want to bypass the mining process and get the necessary resources from the market that is in the hands of the players, you will empty this market of resources four times! Keep in mind that Eve Online's marketplace is not like other MMOs where a non-playable character sells an infinite supply of an item for a fixed price. If you increase the demand for raw materials significantly on Eve Online, you will also increase their prices significantly. To buy the necessary raw materials on the prices, you need to spend 200 trillion isk, which is equivalent to 1.6 million dollars. But even with this huge expense to buy raw materials, you still have to make this item.

The industry function in Eve Online is very similar to the industry function in the real world. In this game, you cannot put ore into the factory so that a car comes out the other side.

  • Raw materials must be converted into refined materials
  • Refined materials must be converted into components. Transform
  • The building blocks must be combined to make the final product

In this particular case, the final product is a space station. If you gather all the building blocks needed to build a space station and start building it in a space factory, it will take until June 1969! This means that from the beginning to the end of the project, 1950 years are inseparable.

To reduce the construction time to a reasonable level, you need the help of hundreds of other players. That is, hundreds of people must simultaneously monitor the construction process of thousands of components in order to finish the project in a realistic time.

In the end, it is hard to say what the final price of this crazy structure will be. 300 trillion ISK is the estimated number of experienced game marketers who informed me. I must re-emphasize that according to the rules of the game, Isk cannot be sold for real money, so consider the figure I'm about to mention only as an equivalent, but if this item is made, something like 2. It will be worth 4 million dollars and will become by far the most expensive virtual item in the world. That means Crystal Palace Space Station and Club Neverdie, which cost $330,000 and $335,000, respectively, and both belong to the Entropia Universe game, will be defeated by a long distance. .

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The creators of this game The structure was included in the game as a joke and said that it will most likely never be built (although die-hard Eve Online fans will interpret this statement as an invitation to challenge).

But remember Bear in mind that at one time the game developers thought that only a few dozen titans would be built, while now titans have become a normal part of the game's battles and their number reaches more than a thousand. For a populous entity like the Imperium and its rivals, it might be possible to build such a structure soon, especially considering how difficult it was to build a Titan in 2006. Was. When that happens, maybe they'll find a good enough excuse to build a structure that's the real-world equivalent of Hoover Dam, the Manhattan Project, and the Moon Landing all rolled into one.

Source: YouTube channel Economics Explained (part one – < a href="https://www.youtube.com/watch?v=dQRzr2zU2Xw" target="_blank" rel="noopener">part two – part three)

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