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Sunday, 14 May 2017

CCP Financial Statements for 2016 - a review

The CCP 2016 Financial Statements were filed at the Directorate of Internal Revenue on 10 April 2017.  I have a obtained copy (they are available to the Public) and discuss them below.

I have filled in the main numbers on my CCP Financials (as published) page to allow a quick comparison of the Profit & Losses, Balance Sheets and Cash Flows of prior years going back to 2008 (i.e. 9 years of numbers).

I have also created new page "CCP hf. ConsolidatedFinancial Statements for 2016" that recreates the 2016 accounts as near as practicable to their original form to allow others to take the information and analyse it themselves.


Revenues are up 31% to a new record high of $86m, pre tax earnings are up 30% to a new record high of $24.6m, post tax earnings are up 4% to a new record high of $21m (the lower % post tax earnings rise than revenues rise is because CCP is back to paying tax again).  Balance sheet is strong: $46m of Cash less $21m of Borrowings; and the Development Costs look prudent.  CCP is generating cash and using it to pay down the debt.

It does seem that the problem years of 2013 and 2014 truly are behind them.

In 2015 CCP had revenues from Eve Online only.  In 2016 CCP had revenues in for Eve Online, Valkyrie and Gunjack.  That makes life more complicated to work out how Eve Online is doing.

However, from my discussion below I suspect:

 - Eve Online (excluding China) – I estimate sales have fallen by 6.5% to $49.9m, back below 2009 levels.  I.e. Eve Online remains in decline, though a slowing rate of decline.

 - That would indicate that the number of paying players had fallen also by 6.5% to an estimated 370,000

 - Eve Valkyrie has generated sales of $22m (I know, that sounds a lot but read below)

 - CCP is worth $271m . . . . . and if my thought process is correct then see below for what that means the CEO could be worth!

Revenues (and estimating how Eve Online has done)

Revenues rose from $65.7m to $86.1m, a rise of 31%.  Now, CCP does not give much away.  For example, it only splits the revenue by type of sale or geography.  It does not split the revenue by game.  What CCP discloses is shown below:

In all, I suspect there are seven revenue streams (really six): Eve Online; Eve China; Dust 514 (now nil); Other Games; Eve Valkyrie; Eve Gunjack; and Other Revenues.

We know that Other Revenues are $5.0m ($7.1m in 2015) – I still have no idea what this refers to but at least we know how much it is.

I suspect Eve China is the Asian revenues.  I also suspect the Eve China is included in Royalties and Licences with the difference in “Other Games”.  In 2015 that put $0.4m in “Other Games” which is a trivial amount but in 2016 it was $3.0m which is more material.  I suspect this may be related to Eve Valkyrie or Eve Gunjack but for now we will leave it where it is.

I suspect Dust 514 no longer brings in any revenues.

So that leaves Eve Online, Eve Valkyrie and Eve Gunjack to work out.  Unfortunately we don’t have much to go on except two pieces of information: 1) CCP tells us the Cost of Sale of Each of the Revenue lines; and 2) CCP tells us the deferred subscription Income (these are subscriptions paid in advance and presumably only relate to Eve Online given Valkyrie and Gunjack are not subscription games.)

So, we can use the above to estimate the Eve Online and other Revenue lines.

Using the Cost of Sales data:

In the above table Eve Online Cost of Sales $3,498,518 in 2016 vs $3,749,661 in 2015.

I suspect Cost of Sales refers to affiliate commissions etc that CCP pays to third parties for Eve Online sales.  If we assumed that the proportional Cost of Sales for Eve Online does not change each year then given we estimated last year that the Eve Online + China Revenues were $58.2m then we can estimate the 2016 Eve Online + China revenues to be $54.3m.  And given we believe Eve China is $4.4m (=Asia revenues) then we can estimate that the Eve Online revenues were $49.9m ($53.3m in 2015).  That would mean that Eve Online revenues fell 6.5% and are below 2009 levels.  See note 1 for details of this calculation at the bottom of this post.

Using the Deferred Revenue data:

In the above table Eve Online Subscription Deferred Revenues are $3,849,865 in 2016 vs $3,733,819 in 2015.

CCP sells Eve subscriptions in 1 month, 3 month, 6 months and 12 month bundles.  At the end of the year CCP will have received payment from players who still have an element of their subscription period to fall in 2017.  It is that proportion that is called “Deferred Revenues – Subscriptions”.  If we assumed that the proportion of deferred subscription revenues does not change each year and if we assume this all relates to Eve Online (not China) then we can estimate that Eve Online revenues increased by 3.1% to $55.0m.  See note 2 for details of this calculation at the bottom of this post.

Either way, we are looking at Eve Online revenues in a range of $49.9m to $55.0m.  For now, I will go with the $49.9m which feels more accurate given it is based on a through year P&L number rather than an end of year balance sheet number.

If we went with that then we could then suggest that the number of players in Eve Online declined again.  However, it has been a long time since we were given player numbers by CCP.  Last year I estimated Eve Online had 396,000 paying players.  If I assumed paying players and Eve Online revenues were correlated then paying players would have also fallen 6.5% to 370,000.

That then leaves us with Valkyrie and Gunjack to work out.  Again, CCP only tells us the Cost of Sales and if I assumed that the Cost of Sales is proportionally the same between Valkyrie and Gunjack then I can allocate the remaining Revenues between those two games.  That allows me to estimate that Valkyrie had revenues of $20.4m whilst Gunjack had revenues of $3.4m.  See note 3 for details of this calculation.

Now, I will say here and now that that feels high for Eve Gunjack and Eve Valkyrie which would therefore suggest the Eve Online revenues I estimate are too low.  But if anyone else can come up with a better way then let me know.

Now, as a final observation, there is something odd going on in Deferred Income (discussed towards the bottom of the post) which may mean that CCP recognised an additional $3m of sales for Eve Online that would have historically sat on the Balance Sheet.  If that was the case then Eve Online would have had $3m sales less than what I think above.

Operating Profits

Operating profits are the earnings before interest and tax = Revenues less operating costs.

Operating profits rose 30% to $26.1m – another new record high.  The Operating Profit margin (=operating profits / Revenues) rose to 30.3% (23.4% in 2015), another new high and much more respectable.

That compares to Operating Profit Margin at Activision-Blizzard (World of Warcraft, Call of Duty, Candy Crush etc) of 33% and Electronic Arts of 31%.  So just about inline with peers.

The difference between the operating profits and revenues are:

Cost of Sales $6.8m ($4.3m in 2015) – I believe this relates to commissions paid to affiliates and third party websites that sell Eve Online subscriptions.  It has risen because it includes the Cost of Sales of Eve Valkyrie and Eve Gunjack as well as the normal Eve Online, Dust 514 and Physical Products and eCommerce

R&D $17.9m ($16.9m).  This is always the interesting one given it was the R&D that nearly took CCP over the edge in 2014.  Now, R&D is never an easy number to nail down.  For example, the $17.9m P&L cost in 2016 is actually $18.2m of salaries (so people costs) less $12.0m of which is capitalised (so that is stuff people are working on that adds value to the games which will play out over the next few years) add $11.8m prior years R&D amortised (I.e. the historic years R&D that is now being expensed into the P&L as it is played out).  In other words, the R&D cost we see in the P&L is made up of some of this years costs plus a proportion of historic costs and therefore it is quite messy and often not comparable to the actual cash cost in a given year.

R&D is the medium term driver of revenues and so I would always expect to see it in the range of 15 – 25% of revenues.  To put this in perspective, Activision-Blizzard spends about 14% on Product Development but CCP should be growing faster than Activision-Blizzard and hence should be spending more on R&D to add content to drive this growth.

Publishing $6.0m ($5.2m) which is 7.0% of revenues and has been on a declining % of revenues since it peaked at 17.3% of revenues in 2011.  I suspect this reflects a greater focus on digital downloads compared to hard disc sales and therefore should continue to decline.

Marketing $12.9m ($7.6m) – this is back up to 15% of revenues compared to the old range of 15 – 20% in 2008 to 2014.  It was cut back in 2015.  Hence, it is back to a range I would expect.  Marketing is the here and now driver of revenues and so I would always expect to see this cost in the range of 15-20% of revenues.  Again, Activision-Blizzard spends about 14% on Marketing.

General & Admin costs $16.4m ($16.3m) - almost flat on 2015 so indications of good cost control from CCP.  These are all costs that are not in the above and not interest or tax.  In the big scheme of things though they are high as a % of sales at 19% but still lower than historic levels of 24 – 30%.  Activision-Blizzard General & Admin costs are a mere 8% of revenues but this represents scale.  The thing about General & Admin is that it tends not to rise as revenues rise.  For example, you only need one CEO if your revenues are $100m or $500m or $1bn etc.  Hence, I would expect this cost as a % of revenues to decline from here.

Staff Numbers

Staff numbers by the end of 2016 was 359 compared to 330 at the end of 2015 – so it looks like CCP is back to hiring again.  Compared to the peak of over 600 in 2010.  In total CCP paid $28.3m in salaries compared to $23.8m in 2015.


Nice to see that CCP is profitable enough to be paying tax.  Good news, when you think about it.

Cash generation

The buck stops here, companies live or die on this.  In 2016 the CCP generated $10.7m cash from its operations compared to $20.6m in 2015.  The $10m difference is due to spending $5m more on R&D and in 2015 there was a disposal that brought cash of $5.7m (World of Darkness).

In 2016 the cash flows all look underlying (i.e. there are no one-offs which benefit or hit CCP that will not be repeated in 2017).

There is one odd change though, to do with Deferred Income and it is discussed further down below and used to be linked to Plex.  Had this oddity not occurred then the cash generation i suspect your have $5m better.


These were all restructured in 2015 and now the company is repaying about $2.5m each year until 2020 and making a final $12m repayment.  That all looks doable especially when we consider that the company has $46m in cash and is generating cash from its operations.

That all said, the current borrowings of $20m does mean that CCP is paying interest of $1.2m in 2016.

Balance Sheet

Pretty strong now.  Cash of $46m less borrowings of $21m is healthy.

There is also $18m of Development Costs sitting on the Balance Sheet (that is staff doing work in prior periods that should hopefully generate revenues in future years, as it does, that $18m is expensed through the Profit & Loss account).  Furthermore, that Development Cost is quickly expensed through the P&L – in 2016 $12m was added to the Development Cost on the Balance Sheet and $12m was expensed through the Profit & Loss account.  In other words, unlike prior years, the Development cost on the Balance Sheet is being quickly and prudently expended.

Deferred Income

As highlighted above, there has been an odd change in Deferred Income.  Deferred Income relates to cash CCP has received but for services provided in the future.  One example is if a player bought a 3 month subscription at the end of November – in this case the period of January and February would be held on the Balance Sheet for December 2016 as Deferred Income.

Plex was another example – if Plex was bought it technically allowed a player to extend their playtime by 30 days at a later period.

It appears that whilst the Subscriptions deferred revenue is still there, the other two lines have almost gone to zero.

Now, this has implications for what we think Eve Online revenues were.  If we assume that the same amount of Plex was bought

I used to think that “In-game purchases not yet consumed” related to Plex.  So I am not sure why it has gone to zero!

I am all ears to any ideas on that one?!

Anyway, had all been as expected I wold have expected to see that “In-game purchases not yet consumed” be at least $3m.  Given it is not then that $3m would have recognised as sales either in Eve Online or something else.

Shareholding of CCP

Along with the Accounts comes the list of shareholders – again, all publicly available information.

Now, I only have shareholdings for December 2014 and 2016.  I don’t have it for December 2015 (I have the % holdings for 2015 but that does not all lend itself to accuracy).

It is interesting to look at who are the top 10 shareholders and how this has changed.

In December 2014 the top 10 shareholders made up 81% of the total shares – 5 individuals and 5 companies / investment vehicles.  In December 2016 this had changed to 95% - 1 individual and 9 companies / investment vehicles.

The above %s are worked out using the 9,012,556 shares in issue.  There are also 1,369,854 B Shares in issue.  I don’t know the terms of these shares but if they proved to be “pari pasu” with the 9,012,556 shares in issue then these %s would need to be worked out including the B Shares.

I don’t know who owns the B Shares though Nosy Gamer suggests they are held by NP and NEA (looking at the 2015 % shareholder list I suspect it is NEA only – but lets go with both for now).  If that was the case then their total shareholding would be 5,364,093 = 51.7% of the shares and therefore above the crucial 50% level.

Nosy gamer has done more work on all this last December

Value of CCP

Potentially, we now have a way of working out what the shareholders think CCP is worth.  During the year CCP purchased shares from some of its shareholders and therefore we can use that purchase price to determine a value for CCP.

In all, 707,035 shares were purchases from existing shareholders by CCP itself for a total value of $18,432,595.  These were normal shares just like almost all other CCP shares in issue.  That implies a value of $26.07 per share.

We know that there are 10,382,410 CCP shares in issue which implies a value of $271m for CCP (I am assuming a B Share is worth the same as the other shares).

That makes CCP worth 12.6x earnings or an EV/EBITDA of 6.3x (EV = Enterprise Value = Value of the shares less net cash in the company).

Worth saying that that compares to Activision Blizzard which is on 26.6x 2016 earnings and an EV/EBITDA of 11.2x.  There would be many reasons for this difference such as Activision Blizzard’s better history of growth and more product revenues streams etc – but, it does make the value of CCP at $271m more believable.

And, lets get cheeky and assume this $26.07 value is correct, we also know that the CEO owns 676,564 shares which makes him worth $18m.  Beers on the CEO then!


Note 1: the calculation I used was Eve Online + China 2015 Sales x Eve Online Cost of Sales 2016 / Eve Online Cost of Sales 2015 and then take away the China Revenues.  [(53,310,928+4,892,557) x 3,498,518 / 3,749,661] – 4,444,570 = 49,860,590

Note 2: the calculation I used was Eve Online 2015 Sales x Deferred Subscriptions 2016 / Deferred Subscriptions 2015.  (53,310,928 x 3,849,865 / 3,733,819 = 54,967,816

Note 3: we know the total revenues are $86.1m and we know or have estimated all other revenue lines as Eve Online $49.9m + China $4.4m + Dust $0.0 + Other Games $3.0m + Other Revenues $5.0m.  So that leaves us with $23.8m of revenues to allocate.  Hence, my estimate for Valkyrie is $23.8m x Cost of Sale Valkyrie / (Cost of Sale Valkyrie + Cost of Sale Gunjack) = $20.4m and likewise for Gunjack is $23.8m x Cost of Sale Gunjack / (Cost of Sale Valkyrie + Cost of Sale Gunjack) = $3.4m.

Sunday, 11 December 2016

Eve Economic Report November 2016 - some really interesting data points

The monthly Economic Report for November is out.

In summary:

November has been a really interesting month for the economic data.

Trade is up though still a huge 39% below February levels.  Lonetrek has moved into the number 4 position for Trade for the first time.

Production is up and is up 28% since February (compared to Trade down 39%).  We can clearly see which regions are rising and so suggesting the Citadel building continues its march.

Mining is down.

A review of Sinks and Faucets suggests that activity was slightly lower this month.

A review of the daily money supply was really interesting with a record breaking 71 trillion ISK leaving the game on the day the Ascension expansion hit followed by 6 new top 10 creation of ISK days as the Alpha Clone players entered the game.

And, as reviewed at the end of the post, there are good reasons why Plex had a tough time in November.

Items of note from Regional Activity

Trade - up 16%

Trade rose for the second month in a row to 596 trillion ISK though that is still 39% down on the February level of 977 trillion ISK.

Now, CCPQuant seems pretty adamant that the Trade numbers are being recorded correctly hence i can't actually say why Trade is not back up to prior levels.  I had been for a while trying to reconcile the Transaction Tax rate with the Trade numbers being given in posts here and here.

But lets go with what we are given.

The top 10 trade regions are below:

1 The Forge 433.8
2 Domain 65.6
3 Sinq Laison 21.5
4 Lonetrek 10.6
5 Heimatar 10.1
6 Metropolis 8.5
7 The Citadel 5.3
8 Essence 4.3
9 Providence 3.4
10 Tash-Murkon 2.6

No changes in the constituents from October.  Lonetrek pushed to number 4 - that is the first time Lonetrek has risen to the number 4 position though this is more a reflection of the ongoing decline of Heimatar and Metropolis.  Perhaps of note that Providence actually fell in value.

The Forge (Jita) remains dominant followed by the trade hubs of Domain (Amarr) and Sinq Laison (Dodixie).  The other Trade hubs of Heimeter (Rens) and Metropolis (Hek) are still up there though Lonetrek remains in contention to take over from Heimeter and Metropolis.  Infact, this is the first time that Heimatar has been knocked off the number 4 position.

As a reminder to new players, the main 5 Trade Hubs in the order we know: The Forge (i.e. Jita); Domain (i.e. Amarr); Sinq Laison (i.e. Dodixie); Heimatar (i.e. Rens); Metropolis (i.e. Hek).

Providence is a business friendly Null Sec space that borders several highsec Regions: Domain / Tash-Murkon / Devoid / Derelik.

To put The Forge (Jita) into perspective, 72.8% of all Trade is done there and this % has remained above 70% for a long time.

The other trade hubs though are a different matter - they are all losing market share.  Domain (Amarr) has 11.0% of all trade but that is on a declining trend.  It was 11.7% in February.  Sinq Laison (Dodixie) has 3.6% of all trade vs 4.3% in February.  Heimeter (Rens) has 1.7% of all trade vs 2.3% in February and Metrolpolis (Hek) has 1.4% of all trade vs 1.6% in February.

Just looking at the winners in market share (i.e. those regions taking proportionally more of the Trade over time) then Lonetrek is a clear winner taking its share from 1.4% to 1.8% and Outer Ring has moved up from 0% to 0.3% - likely Blueprint buying in the mining barge changes.  There are others but these are the stand out ones.

Transaction taxes rose 18%, so faster than Trade.  This has been a feature for a while - Transaction Tax fell slower than Trade during the summer and is now rising faster than Trade during the winter.  I can't explain that (if i assume the Trade values are correct) - as far as i am aware Citadels can not change the Transaction Tax rate.

Eye catchers of the month are: Essence rose 34% to 4.3 trillion ISK though remains 34% below February levels; Tash Murkon rose 27% to 2.6 trillion ISK though remains 24% below February levels; The Citadel rose 31% to 5.3 trillion ISK and is once of the few regions seeing trade above February levels, in this case by 16%; Verge Vendor rose 24% to 2.0 trillion ISK though this is still some 32% below February levels.

The big losers since February in the 90% club (i.e. all fallen over 90%) are: Querious is down 93% to 110 billion ISK; and Wicked Creek is down 94% to 102 billion ISK.

The Fallen angel (former big time players with Trade over 2 trillion are) remains Deklein, the home world of the losing side in World War Bee, which used to be 2.6 trillion ISK is now 692 billion ISK.

Of the 64 Regions in Eve Online 17 have higher Trade than in February.  That leaves a noticeable 47 still doing Trade at a lower level than February.  Those 17 are: Aridia; Cache; Cloud Ring; Delve; Detorid; Devoid; Esoteria; Fade; Immensea; Omist; Outer Passage; Outer Ring; Paragon Soul; The Citadel; The Kalevala Expanse; The Spire; and Vale of the Silent.

Contracts: another way of measuring the Economic activity in Eve is to look at the volume of contracts placed.  If i assume 10,000 ISK broker fee per contract then in October there were 22.2m contracts placed which is an 18% rise on October and indeed is up 30% since February.  The peak number of contracts occurred in April when 22.3m contracts were placed.

Office Rental Fees: office rentals fell 3% to 366 billion ISK, another new low since i have been watching the numbers since February.  In part, i suspect, due to the fall in Trade and so corporations pulling out of Trade Hubs such as Rens, Hek and Dodixie and also due to traders moving to the Citadels.  The Fees peaked in May, a month after the launch of Citadels, at 626 billion ISK.  In fact, Office Rental Fees are a rare example of a cost that fell in November.

Production - up 16%

Production rose 16% to 131 trillion ISK of items manufactured, now 28% above February levels but below the 145 trillion Citadel induced peak in May.

Interesting to note that since February Production is up 28% but Trade remains down 39%.

The only way i can explain that is Corporations are mining and processing their own raw materials for Citadel Production rather than buying them in the market - worth noting that mining has remained almost continuously above the February level by 4-18% each month.

Alternatively, raw material purchases were made in prior months to stock build, or the buying from the market was done in one step (i.e. not character A buying from the market to sell to character B who sells to character C etc but rather character A buying from the market to directly stock pile to manufacture a Citadel).

Of note, Manufacturing costs as a % of the Value manufactured is running at 1.64%.  I.e. in September 131 trillion ISK of items were manufactured which cost 2.2 trillion ISK in manufacturing fees.  This % has varied from 1.56% to 1.95% since February - hence we are currently at the low end of the range.

The top 10 Production Regions for November are below:

1 The Forge 24.8
2 Lonetrek 13.4
3 The Citadel 12.1
4 Delve 10.6
5 Domain 6.7
6 Sinq Laison 4.1
7 Providence 3.7
8 Cobalt Edge 3.5
9 Geminate 2.9
10 Malpais 2.5

No major changes in the top 10 to report on other than Deklein has been replaced by Cobalt Edge.

Worth noting that the Trade Hubs of Heimatar and Metropolis are not in the top 10 - though Heimatar has never been in the top 10 but Metropolis used to be.

There are some big movers this month (all i suspect related to Citadel building): Cobalt Edge increased 62% to 3.5 trillion ISK; and Delve rose a massive 82% to 10.6 trillion ISK - and that is on top of the 66% rise in October to 5.8 trillion ISK, Delve has been gathering momentum since February.  Someone has clearly moved in.

The Regions of The Forge and its neighbours Lonetrek and Citadel dominate - they were always big production centers but now take on the role as being where Citadels are being focused in High Sec to take business away from Jita.

For new player informaion - The Forge remains the top slot - makes sense, many people will produce near where they buy the raw materials and/or intend to sell the finished items.

Domain (Amarr) and Sinq Laison (Dodixie) are the other two major Trade Hubs - hence would expect Production to be there in volume as well.

Providence, is a Null Sec Region but borders several highsec Regions: Domain / Tash-Murkon / Devoid / Derelik and has a more inviting stance for players - hence we would expect to see it be up there in the Production rankings.

Notable risers since February that rose over 100% and are now over 1 trillion ISK in production are: Cache up 132% to 2.5 trillion - Cache has seen two strong rises in October and November, i suspect we are seeing a Citadel of two in there; Cobalt Edge up 322% to 3.5 trillion - like Cache, this region has seen two strong monthly rises indicating some Citadel building; Delve up 1673% to 10.6% trillion - this is the notable success story of Citadel building, i suspect; Immensea up 189% to 1.5 trillion; Insmother up 258% to 1.2 trillion ISK; Outer Passage up 106% to 1.0 trillion ISK; Perrigen Falls up 138% to 1.1 trillion ISK; Pure Blind up 165% to 1.0 trillion ISK; and The Spire up 352% to 1.1 trillion (that may be someone moving in).

Noticeable that those in the Trade 90% club (i.e. seen trade fall over 90% since February) have also seen their production fall about 80% since February: Querious and Wicked Creek.

Mining - down 12%

Mining fell 12% from its record high in October to 24.5 trillion ISK.  Other than a slowing in Citadel building i have no explanation for that.

Below is the top 10 Mining Regions in November:

1 Delve 2.1
2 The Forge 1.4
3 Lonetrek 1.3
4 Cobalt Edge 1.3
5 Domain 1.1
6 Malpais 1.1
7 Tash-Murkon 0.8
8 Metropolis 0.8
9 Sinq Laison 0.8
10 Everyshore 0.7

Delve continues its astonishing rise by keeping the top slot.  Now 8.6% of all mining in Eve is in Delve - that is a new record February, even The Forge only managed a 7.2% market share back in April.  It used to be languishing in the 40s and now is the top Region for mining.  Note Delve is also in the top 10 for Production.  And Imports into the Region have been rising strongly in recent months.  Here, it seems we have a new home region or someone.

Looking elsewhere for Regions that are taking market share (i.e. regions that are seeing proportionally high % of all mining than in the past): Cobalt Edge now commands 5.3% of all mining vs 2.9% in February; Deteroid has 1.7% vs 0.1% in February; Immensea has a 2.0% share vs 1.0% in February; Insmother has a 2.1% share vs 1.0% in February; 

The market share losers have been Deklein (home region of the losers in World War Bee); Branch seems to have halved its share in November from 2.2% to 1.1%; Feythabolis has a 0.7% share vs 1.9% in February; Oasa has fallen from 2.7% in February to 1.3% in November; Providence is down rapidly in the last two months to 2.8% (peaked at 5.6% in April);  and Vale of the Silent has fallen from 2.7% to 1.4%.

Destruction - up 3%

Destruction rose 3% to 34.1 trillion and so bounced off the 2016 low set in September.

Insurance received rose to 5.6 trillion though this is still a low compared to the 7 - 8 trillion that was received in the months of the World War Bee.  As a percentage of items destroyed this is 16.5% - so just up of the 2016 low set in October.  We should not be surprised by that - players are less likely to insure when ratting than when entering a war zone to fight.  At the height of World War Bee Insurance Received represented 23% of all items destroyed.

Insurance premiums paid rose 10.6% to 2.5 trillion ISK and represents 8% of items destroyed which is about average for non war periods.

Whoever runs the Eve Online insurance business is making a 3 trillion loss per month during peace time and a massive 4.5 trillion loss per month during wars!

Below is the top 10 Destruction in November: 

1 The Forge 3.2
2 The Citadel 1.6
3 Catch 1.6
4 Tribute 1.6
5 Pure Blind 1.5
6 Black Rise 1.5
7 Providence 1.3
8 Lonetrek 1.3
9 Domain 1.1
10 Sinq Laison 1.0

The Forge, as ever, remains top dog for destruction though this month saw 9.3% of all destruction vs the more normal 6-7%.

Catch has been rising during 2016 and having flirted with the top 10 no seems a more permanent member and is steadily rising up the rankings.

Imports and Exports

I normally watch the Imports and Exports as an indicator on the travel of goods or the movement of war.

That said, imports (and exports) were flat at 7.6 Trillion ISK in November, remaining at the 2016 high.

Whilst Trade may be down 39% since February, Imports / Exports are up 31% which represents the moving of Citadel materials around Eve.

Looking at trends: the movement into Delve continues since August.

Other Regions that have seen high net imports in the last three months are: Deteroid; Immensea; and Oasa.

Items of note in the Sinks and Faucets

Sink = ISK leaving the game (i.e. Brokers Fees); Faucet = ISK coming into the game (i.e. Bounty Prizes).

In November there was an inflow of ISK into the game of 14.9 trillion ISK.  The amount of ISK in the game is 978 trillion ISK, which is a new record.

Now, before everyone starts clapping and hollering it is worth saying that this was the a poor month for ISK creation with only 16.6 trillion ISK created.  The real driver of the rise in ISK was that only 1.7 trillion ISK left the game due to players leaving - that is a record low number.  This record low 1.7 trillion i suspect is not due to a low number of players leaving the game but is likely due to a huge number of Alpha Clone State players incoming to the game - which is discuss more below in the Money Supply section.

In all, it may be fair to say that November was a slower month than October.

Going through Faucets of note: Bounty prices fell 2% to 50 trillion ISK - though off the new 2016 high set in October; Commodity payments rose 4% to 17 trillion ISK - though still below levels seen in April; and Incursion payments fell 2% to 9.6 trillion ISK - remains volatile but in long term decline.

Project Discovery made a well 50% rise to 136 billion ISK - though still down from the 340 billion in the March when it was introduced,

Going through the Sinks of note:

Blueprints were up a massive 196% to 17.9 trillion ISK reflecting the mining barge changes and the Engineering Complex introduction; Skills books were up 19% to 12.2 trillion ISK - close to a 2016 record and, i suspect, reflects the introduction of the alpha clones; Broker Fees were up 17% to 12.1 trillion ISK - moving inline with Transaction Taxes; Transaction Tax was up 18% to 10.1 trillion ISK.

War Fees rose 18% to 347 billion ISK.  Now, back during World War Bee the War Fees averaged 400 - 440 billion, so not there yet.

I discussed the Contract Broker Fees earlier which are now at a record 222 billion, up 18%.

One odd item of note, there is a small sink called "Celestial", i have no idea what it is but it has a suspiciously round numbered outflow each month: Feb = 74.7 billion (i.e. an exact 74,700,000,000); March = 45.0; April = 2.7; May 8.1; June = 18.0; July 3.6; August 3.6; September 9.9; October 1.8; and November 3.6.

Items of note in the Money Supply

November has been a hugely interesting month when it comes to Money Supply.

If i looked at the percentage daily change in ISK entering and leaving the game (i.e. daily change in ISK divided by the prior day's ISK in the game) then six of the all time top 10 inflows happened in November and the all time record outflow happened in November.

Firstly, the daily top 10 inflow and outflow table is below:

Top 10 Inflow Days Top 10 Outflow Days
16/05/2016 3.99% 38,266,990,704,582 15/11/2016 -7.30% -70,814,283,297,472
16/11/2016 1.95% 17,521,190,050,625 31/05/2016 -4.32% -43,005,264,398,399
14/05/2016 1.18% 11,181,224,392,535 20/08/2014 -4.31% -32,711,831,583,118
19/11/2016 1.12% 10,439,477,321,814 12/10/2016 -2.55% -24,850,862,704,804
17/11/2016 0.86% 7,869,695,577,370 27/04/2016 -1.17% -11,590,693,603,019
24/11/2016 0.82% 7,812,574,162,003 13/05/2016 -1.10% -10,585,123,745,593
21/11/2016 0.70% 6,660,689,492,734 24/05/2016 -0.66% -6,550,753,709,589
17/10/2014 0.66% 4,918,151,977,811 18/05/2016 -0.60% -6,041,579,702,193
20/11/2016 0.60% 5,649,820,709,308 28/04/2016 -0.56% -5,483,745,855,943
02/11/2014 0.57% 4,355,450,866,601 08/01/2016 -0.52% -4,849,236,603,559

Starting with the outflow.  The prior record came when Citadels were introduced and i suspect related to the buying of Citadel blueprints.  That was a mighty 43 trillion outflow.

This has now been dwarfed by a mega 71 trillion outflow on 15 November 2016.  This was the day the Ascension Expansion arrived which introduced Clones States.  Quite why that should lead to the single largest % and absolute level of ISK leaving the game is beyond me.

However, for the record inflows which, note, all happened after the Ascension Expansion arrived (i.e. on the 16 / 17 / 19 / 20 / 21 / 24 November) i assume is due to incoming players creating their ISK.  That is a serious number of new players!  In all, those six days created 56 trillion of ISK.

Imagine what would have happened if the Citadel Blueprints had come in December - the inflow in November would have been huge!

The second greatest outflow of ISK from the game occurred on 20 August 2014 when a massive 32.7 trillion ISK left the game (=4.3% of the prior day's ISK in the game).  Most likely to do with the banning of SOMER Blink from the game on that day.

Player to Player Fees

This is a new piece of information.  Since PoCos players have been able to collect taxes from other players for the use of player owned facilities but the launch of Citadels and taken this a step further.

Growth continues at a slow pace but growth nonetheless.

In November 1.8 trillion ISK (October 1.6 Trillion) was paid from one Character to another in the form of Citadel Broker Fees (1166 billion - barely up on the 1051 billion in October), Planetary Export Taxes (439 billion vs 419 billion in October ), Reprocessing Tax (146 billion 132 billion) etc.  Seems Citadels are clearly on the rise, just slowing in November.

Main points of interest for now are that:

Broker fees of 1.166 trillion compares to NPC broker fees of 12.1 trillion - hence Citadels command 8.8% of the market, down from 9.3% in October.  Which is a surprise, i would have thought it would have risen - perhaps reflects that the new Alpha Clone State players buy from NPC stations first.  However, worth remembering that in most Citadels the Broker fees are priced very low to attract traders - hence i suspect this 8.8% market share is understated.

Planetary Export tax of 433 billion and Planetary Import tax of 85 billion represent about 65 - 75% of the total tax collected which, as we would expect, shows that the player owned PoCos are almost everywhere.  Given NPC tax still applies at player owned PoCos (hence, the tax share of player fees can never get to 100%) i suspect we can be confident that almost every planet now has a player owned PoCo orbiting it.

Office rental fees at 149 billion ISK represents 28.9% of the rental fees paid vs 26.9% in October - hence it does seem that players are moving into the Citadels.

Mapping all that onto Plex Prices

I greatly suspect players, like myself, use surplus ISK generated each month to buy Plex.  When i say "surplus" i of course mean surplus to all other requirements - at the end off the day, ISK sitting in my wallet will never grow.  It should either be about to be invested into my business or should Buy Plex.

Normally, there is 20 - 30 trillion of surplus ISK generated which, through the mechanisms of trading, makes its way nicely up to the business owners and bankers in Eve.  When i say "surplus ISK", i mean the difference between the Faucets and the Sinks.  The ISK that leaves with retiring players is not a factor in all this - though the absence of those retiring players may become a factor in future periods.

The players then park some of that ISK in Plex.  That is what makes Plex an inflation hedge - where inflation is defined as money supply.  That is, the rising amount of ISK in Eve.

As a rule, surplus ISK is normally generated by existing players each month.  However, we have had three recent events which have disrupted that flow.

Firstly, World War Bee, i suspect, will have seen a higher than normal selling pressure to finance the war.  For a few months that extra ISK generated went into financing the war and i suspect hoarded reserves of Plex were sold to help out.  That i suspect is now largely over.

Secondly, Citadel building will also have seen a higher than normal selling pressure to finance the cost of building Citadels.  That appears to be scaling back to more of an ongoing expense rather than the rush we saw recently.

Thirdly, the rise in Transaction Taxes and Broker Fees has added a further 5 trillion of additional ISK sink to Eve.  Worth noting that it was an additional 15 trillion ISK sink until players discovered "off-shoring".  That is here to stay though good to see player innovation minimizing its affect.  To put the changes in the tax system into perspective: in February 15.7 trillion ISK was spent on Transaction taxes and Broker fees as a result of 977 trillion ISK of trade; in November 22.2 trillion ISK was spent on Transaction taxes and Broker fees as a result of a mere 596 trillion ISK of trade.

We have though recently had a couple of other headwinds:

Firstly, the Betting Site ban remains to be seen what effect it has.  It would be a drag on Plex if betting sites held Plex and had to sell to return ISK to players or if they had been net buyers of Plex historically - we will see.

Secondly, the introduction of Alpha State Clones means that players can now play for free (within some limits) and hence in the near term we are bound to see less demand for Plex than would otherwise have been the case (i.e. if those new players had created Omega State accounts then presumably they would be buying Plex.

Thirdly, with the introduction of Ascension we now have Industrialists bringing Engineering Complexes online and therefore doubtless selling their Plex to bring in the ISK to make this happen.

Furthermore, in November we had a huge 71 trillion one day outflow which would likely be a short term headwind to Plex buying as well.

Hence, lets see how this plays out - but November has had reasons not to be a good month for the demand and supply of Plex.