Account expiry embarrassment

I finance my account with Plex and therefore i get the monthly email reminding me to renew my subscription.  Which i forgot about.  And i also forget about the one reminding me i have 19 hours left.

I log in 4 hours overdue.  Account expired, can't get in.  Clearly i am my own worst enemy.

Annoyingly, in my corporation hanger in Jita are 72 Plex.

My solution:

• I get an alt from another account (which had not expired) to fly to Jita
• I buy a Plex (i could have just taken one from the corp hanger in Jita)
• Activate it
• and "Donate 30 days of game time" to my alt in the expired account

I was not able to do this from a Plex in the corp hanger unless i was in Jita - hence the need to at least fly over there.

I may have been able to move one from the corp hanger to an alt hanger in Jita and Donate it remotely - but i did not try that.

Needless to say, when the reminder email came the next month - i renewed immediately!

I have labelled this under "blunder".

More lowly priced sell orders outside of Jita

As i discovered before, i have found again (a week or so ago) some sell orders posted in a trade hub outside Jita where quite often the Sell order is at a lower price than the Jita Buy order.

The batch of 5 trades below netted me profits of 304m ISK before fees and taxes.

First trade:

In Rens there were 11 items of the Capital Semiconductor Memory Cell I on sale for just under 60m ISK each (660m in total), as shown below.

However, in Jita they are being sold for 72.9m ISK each and, more importantly, there are Buy orders up for 66m ISK each, as shown below.  The volume tab indicates there is real volume at these price levels - so these Buy orders are likely for real.

If i chose to sell directly to the Buy orders i would achieve a profit of 6m per item, or 66m ISK in total before fees and taxes.

Second Trade:

In Hek there are 11 items of Capital Cargohold Optimization I on sale (spread over 4 sell orders) for just under 25m ISK each, or a total of 275m ISK, as shown below.

However, in Jita there are Sell orders for up for 35m ISK and Buy orders up for 31m ISK each, as shown below.  Again, the volumes / prices paid check out.

Hence, again, even if i sold direct to the Buy orders i would make 6m profit an item, or 66m profit in total before fees and taxes.

Third Trade:

In Hek there are 10 items of Capital Core Defense Field Extender I up for sale for 40m ISK each, spread over 4 Sell orders, as shown below.

Again, in Jita there are sell orders up for 50m ISK each and Buy orders for 45m ISK (though only 8 Buy orders), as shown below.

Again, even if i sold the 8 items direct to the Buy orders for 45m ISK and managed to achieve 50m ISK each for the other two items i would make a profit of 60m ISK before fees and taxes.

Fourth Trade:

In Hek, there are 14 items of Capital Drone Control Range Augmentor I up for sale for 13m ISK each, spread over 3 Sell orders, as shown below.

However, in Jita they are being sold for 17m ISK each, as shown below.  The volume / Price tab indicates that the 17m ISK is a real price.

If i managed to sell all my items for 17m ISK each then i would make a profit of 56m ISK before fees and taxes.

Fifth Trade:

In Hek there are 9 items of the Capital Semiconductor Memory Cell I on sale for just under 60m ISK each, as shown below.

However, in Jita they are being sold for 72.9m ISK each and, more importantly, there are Buy orders up for 66m ISK each, as shown below.  The volume tab indicates there is real volume at these price levels - so these Buy orders are likely for real.

If i chose to sell directly to the Buy orders i would achieve a profit of 6m per item, or 56m ISK in total before fees and taxes.

Always check the volumes of potential sell ideas

Below we have an example of an item up for sale in Hek.  It looks promising.

I can buy the item in Jita from a Sell order for ISK and sell it in Hek for 350m ISK, as shown below.  A good trade.

However, a check of the volumes going through at Hek, shown below, makes a trade a non starter.  The last trade to go through was at 205m and before that 160m and 208m.  Therefore, it is somewhat unlikely that the Sell order of 350m will be fulfilled.

Someone blundered - but asked politely for their ISK back.

I log in to see one of my alts with 2.3bn ISK in their wallet.  Not bad for one night.

But then there is also a mail waiting from a player - seems he blundered on entering a Buy order and my Sell order picked up the 1.2bn ISK or so extra:

and the current market backs this up:

Had this blunder gone silently i would have kept the ISK (and no doubt posted it on this blog).

However, to be fair to the player - he (i assume it is a he) did get in contact, was polite and there is no harm in attempting to reverse some of the loss.

So, the state of affairs is this:

• i have a Sell order for 213m ISK
• i get 1440m ISK
• the player meant to do a Buy order for 144m ISK
• the blunder in my favour benefited me by 1227m ISK (1440 - 213)
• the blunder against the player hit him for 1296m ISK (1440 - 144)

So, i return 1.1bn ISK to the player and keep the other 100 - 200m ISK for myself to cover sundries like the sales tax (13m ISK) and a slap up meal at Miss Miggins Pie Shop (thats is a Blackadder reference).

Watch for lowly priced sell orders outside Jita

I see this sort of thing quite often in trade hubs outside Jita.

Below are two items i was looking at where the cheapest Sell orders were oddly lower than the other Sell orders.  I was in Rens at the time.

The items were the Capital Core Defense Field Extender I and the Capital Drone Control Range Augmentor I.

In the case of the Capital Core Defense Field Extender I there were 2 Sell orders for 3 and 4 items, both at the same price and some 10m ISK below a very large Sell order.

In the case of the Capital Drone Control Range Augmentor I there were 2 Sell orders for 5 and 5 items, both at the same price and some 5m ISK below the next Sell order.

I am willing to bet all 4 of those Sell orders are from the same player and both invite further investigation.

Sure enough, comparison of the prices to Jita prices reveals a profit to be made.

In the case of the Capital Core Defense Field Extender i can buy the Sell orders out at Rens, ship them to Jita and sell them to normal priced Buy orders at 47m ISK (as shown below) getting about a 50m ISK profit in total.  The Jita Buy orders look normal so are very unlikely to be a scam.

In the case of the Capital Drone Control Range Augmentor I i can buy out the Sell orders in Rens and post them as Sell orders in Jita for about 15m ISK each (seems to be plenty of volume going through at that price as shown below) making about 60m ISK profit in total.

Hence a low risk 110m ISK profit less the 12m ISK cost of having Push Industries ship them all from Rens to Jita.

The beauty of buying from Sell orders that are materially lower than the established market average is that they tend not to be a scam (buy low, sell fair).

CCP Games - my stab at the 2014 to 2016 financial forecasts

On the back of the CCP Games half year results to June 2014 being out i have updated my forecasts for 2014 to 2016, which can be seen on this page in my blog.

That is a lot of numbers, i know.  So, in summary:

• I suspect i am wrong mainly because i do note know 2 key things
• Firstly, i am not sure what the ongoing Research & Development spend will be - i have estimated about $24m per year
• Secondly, i don't know if CCP still has access to the tax credits from the US now that they have closed down World of Darkness (that brought in a few million $ each year)
• Having said that i have Revenues going backwards in 2014 by 3.7% and then advancing onwards
• I have CCP being mildly profitable
• I have nothing in for Valkyrie revenues
• BUT i still have them losing cash given the spend on Research & Development
• Which means that their debt rises too far by the end of 2015 - that is why i think i am wrong!

So, lets look at the key questions i have and then below that i will show the summary numbers:

Question 1: the R&D (Research & Development) expense in the Profit & Loss account is all over the place given the prior spend on Dust and World of Darkness which is now over and has been written off.  Hence, i don't have a feel of what the ongong spend if for Eve Online and Valkeryie.  I have assumed about $23 - 24m though it could be as low as $16m given that was what was spent in 2012. Essentially i assumed CCP spends 30% of revenues on R&D.

Question 2: i don't know what the other one-off costs in 2014 were for closing offices etc.  If i knew those i could get a better idea of the underlying costs of CCP going forwards.

Question 3: CCP acquired a US company in part for the tax breaks.  I don't have a feel as to what the ongoing tax credits should be.

aside from that, I could do with more data on the number of subscribers.

That all said, the summary from my work so far is:

• Revenues fall 4% in 2014 to $74m with Eve Online falling 6% offset by a fast growing China.  So 2014 would be the first revenue decline in CCP history.
• In 2015 revenues grow to $78m and then $82m in 2016, i.e. 5% growth per annum
• CCP makes a loss in 2014 of $23m mainly due to writing off World of Darkness for $24m (less any tax benefit).
• In 2015 and 2016 CCP make about $1 - 2m per year.
• Net debt rises to $18.5m in 2014 and then to $24m in 2015 and $29m in 2016

OK, i suspect the above is wrong.  My ongoing costs are likely too high.

If R&D was more like $17m per year (similar to 2012) reflecting ongoing Eve R&D and the development of Valkyrie then the above would look very difference.  Profits and cash would be would be $6 to $8m better in 2015 and the net debt would be falling.

I don't expect we will get an update from CCP until the 2014 accounts are out sometime in 2015.

In any event, i suspect the focus on keeping new players will be enhanced.  Getting a new player to enter the game is expensive enough.  Within other businesses keeping a new player through the steep learning curve is the prize - and i can't see Eve Online being any different.

Eve Business Blogs - updated

I have updated my page that lists the Eve Business Blogs that i am aware of.  These are blogs that have at least a reasonable element that covers making ISK in Eve Online.

In total, i added 1 new blog - the eve industrialist

If anyone is aware of other Eve business blogs (any blog that has a reasonable element of making ISK in Eve online) then do let me know.

The list is also below (and on my blog roll >>>>):

1	A noob's tale in eve	General Business Blog
2	A Scientist's Life in Eve	Industrial Blog
3	Deep in EVE	General Business Blog
4	Eve Bumbler	General Business Blog
5	Eve Mogul	General Business Blog
6	EVE Plex in 21 Days	Trading Blog
7	EVE Simplified	General Business Blog
8	EVE-fail	Trading & Industry Blog
9	Evehermit	Trading Blog
10	EvePLEX	Trading Blog
11	Foo's Eve Musings	General Business Blog
12	Fuzzwork Enterprises	Industrial Blog
13	Greedy goblin	General Business Blog
14	K162space	Industrial Blog
15	Low Sec Lifestyle	General Business Blog
16	Mabrick's Mumblings	General Business Blog
17	Manufacturing Confusion	Industrial Blog
18	Markets for ISK	General Business Blog
19	Merchant Monarchy	Trading Blog
20	Prosper: An EVE Online Tool Development Blog	Industrial Blog
21	Spaceships & Spreadsheets	General Business Blog
22	The Chronicles	General Business Blog
23	The Eve Industrialist	Industrial Blog
24	The Indecisive Noob	General Business Blog
25	The Lazy Pilot	Industrial Blog
26	tothebreach	General Business Blog
27	Twenty five Tons of Heavy Steel	General Business Blog
28	Vahrokh Vain	General Business Blog
29	Valkrrs Eve Industrial Journal	Industrial Blog
30	Yinmatook's EVE Wanderings	General Business Blog

(For what it is worth, in its day the business blogs on World of Warcraft numbered many more though i notice there are very much fewer in recent times).

A new angle on Plex (perhaps)

In the CCP accounts there is a line in called Deferred Income.  In accounting terms, Deferred Income is where CCP has received cash but the sale relates to a future period.  A good example is someone who pays up front for 6 months of subscriptions - CCP will only recognise portion of the sale as each month passes.

Plex, i suspect, could fall into this camp:

1. Someone buys plex for $15.  So the accounting entry is CCP receives $15 in cash and also has $15 Deferred Income (so far all Balance Sheet items);
2. Then that plex is used to extend game time by 1 month so CCP then recognises the sale of $15 and cancels the $15 Deferred Income (so now CCP can recognise the $15 on the Profit & Loss account as revenue)

In the CCP accounts there used to be one line called Deferred Income but since the end of 2013 it is now split into:

• Subscriptions
• In-game purchases not yet consumed
• Sale of goods not yet delivered

It is clear what "Subscriptions" is.  I am not sure what "Sale of goods not yet delivered" is - but it is a small amount so we can safely ignore it.  I greatly suspect "In-game purchases not yet consumed" are Plex that have been created but not yet used and/or Aurum that has been bought but not yet used.  I.e. Plex sitting in hangers or on the market for sale + Aurum that is sitting in peoples accounts.  Unless there is something else players can pay real money for?

Below is the relevant part of the CCP accounts:

Deferred Income	2012	2013	2014 H1
Subscriptions	3,964,814	4,359,823	4,297,855
In-game purchases not yet consumed	1,067,512	2,108,158	2,302,098
Sale of goods not yet delivered	198,376	137,791	52,214
	5,230,702	6,605,772	6,652,167

If we focus on the line "In-game purchases not yet consumed".  At December 2012 it was $1.1m, at December 2013 it was $2.1m and at June 2014 it was $2.3m.

Now, if i make the rash assumption that Aurum is spent immediately it is acquired then the value of Plex in the game doubled during 2013 but has only increased by 10% in the six months to June 2014.  If i then make the assumption that the price of Plex is $15 (i know, there were discounts etc) then at December 2012 there was 71,000 Plex in the game, in December 2013 there was 141,000 Plex in the game and as at June 2014 there was 153,000 Plex in the game.

In some ways this does not add much to the debate on the price of Plex though it does suggest only a net 13,000 additional Plex were created in the last six months (= Gross creations of Plex less Gross usage of Plex).

That may mean holders of Plex have slowed down their buying (i.e. not so much of an increase of Plex sitting in hangers or on the market) or the creators of Plex have slowed down their creation (i.e. less people creating Plex by paying the $15).

Given the price of Plex has been rising i suspect it is the supply of Plex that has slowed.  I suspect that people buy the Plex to create the ISK and as the price of Plex gives more ISK then less Plex need be bought.

Unfortunately for us, there is not much narrative with the CCP accounts and so I can only make assumptions at this stage.  In the Prospectus issued in June 2013 there was much more detail.