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Friday 22 December 2023

Month end update - November 2023

I made 32bn profits in November 2023 of which 101bn was distributed on to the Oz Tank Show (100bn to Oz Tank Show and 1bn to a Twitch show). Therefore, my wealth fell by 69bn isk to 1.101 trillion isk.


Distributions

These days, the aim is to distribute my profits to the Oz Tank Show.  Hence, my wealth will barely increase and any monthly surplus will all be given away at some point.

So far i have given 260bn isk to the Oz Tank Show.

The show started in July and i have generated profits of 238bn in July - November and distributed 260bn.  There will be no show in December which will allow my profits to catch up.


Four Omega Accounts to pay for

Keeping 4 accounts on Omega cost me 7.0bn isk in November.  The cost has fallen given the deals i have taken part in over recent months.


Second month making 1bn per day profit

In October when i stripped out what i made in skill farming from the Omega-MCT deal which i discussed here i worked out that i made 1bn per day (33bn profits).

November has been no different.

This has taken me by surprise, i was constantly doing 2bn profits per day since September 2022.

Not sure what the problem is but sounds like i need to revisit what i am trying to sell.  I suspect i am focusing too much on items with no competition rather than items with 1 or 2 competitors.


The basic numbers

In November i had sales of 219bn isk vs October of 334bn.  That said, the underlying sales in October were 251bn (+83bn skill farming).  But, still a decline of 13%.  That was a poor show.

Item profits were 69bn isk which is a healthy margin of 32% (69/219).  So, again, the problem is not profitability.  The problem is sales.

Taxes and Courier fees came to 31bn isk.  Then add in the 7bn plex cost to Omega 4 accounts takes me to 32bn profits made in November.

And then off that comes the 101bn distributions.


What i am selling

Same as usual - Implants, Blueprints, ship equipment.

I have a rule that the minimum profits have to be 100m isk.  It is no use me buying items for 5m to sell them for 15m.  The profitability may be great but that wont move the dials.  That said, it is surprising how many items i can buy for 120m and sell for 220m.  At that isk level, players re-equipping don't care about spending an additional 100m isk to save time.

There is a competitor for the Blueprints in a few of my trading locations now.  Updating their prices daily.  Will be a battle of attrition.  But i can't give up and therefore it is a costly battle of attrition.

Implants are doing the best now and i often sell a family of implants at a time (i.e. the alpha, beta, delta, epilson, gamma and omega implant).


Manufacturing

All but on hold for now - i don't really have enough time to devote to it.  I would love to find a system or process  that would allow me to have continuous manufacturing in place to make decent profits.


Planetary Interaction

Started this up again to remind me how it works.  Following the changes to volumes, i can keep my planets going for a long time before i need to pick anything up.

The ultimate aim is to do this in low or null sec.


Station Trading

All in Jita.  This is going ok though has slowed right down to 13bn sales.  Takes up very little time so i will stick with it for now.  But i need to ramp this up.


Alpha Accounts

They have all now stopped trading.  Other than Arnon and Alentene, all the other locations show little promise at this stage.  I will keep them on but they will be dormant for now.


Non-Trading activities

Putting Manufacturing on hold and stopping Planetary Interaction all makes sense but is a little sad for me.  I would love to find another isk making activity that would fit into my schedule.


Current Wealth

Current wealth is 1.10 trillion ISK made up from:
  • Plex held as an investment 0bn ISK
  • Items in hanger for sale 62bn ISK
  • Items in hanger for use in business 11bn ISK
  • Omega brought forward 21bn ISK
  • Buy orders on the market 22bn ISK
  • items for sale 1.2 trillion ISK
  • less a 20% provision 240bn ISK*
  • ISK in wallet 27bn ISK

When i add up my wealth, I don't count assets I use in the course of my business such as ships, fittings etc nor do I add back any expenses such as skills purchased etc.  The wealth I disclose is made up of items that are ISK or are in the process of being converted to ISK or are used to generate isk that can be readily resold back onto the market.  Any ships or skills or fittings etc i buy are counted as expenses in that month.  The only exception to this rule is Blueprint Originals i use for manufacturing.  They are held at cost.

* I take a 20% provision against the items I am selling.  Eve calculates wealth by adding up the value of the sell orders hence it is possible to increase your wealth by buying an item for 100m ISK and putting a sell order for 120m ISK (in this case your wealth would increase by 20m ISK).  For me, I want my wealth to be calculated at cost.  I know that the value of my sell orders will likely fall over time as I update my orders downwards as competition reduces their prices before my items are sold.  Hence the 20% provision is my best guess as to what the maximum reduction I would need to make to my sell orders as a whole before they are sold.  In an ideal world I would value my sell orders at the value which I bought the items for.

Sunday 3 December 2023

Platinum Starter Pack Offer for 48 hours - great deal, 3 months Omega for free.

If like me you Plex your account and tend to take the three month Omega deal for 1200 Plex then this offer is a great deal.


The deal

Only one per account.

In the new Eden Store (accessed ingame) there is an offer for the Platinum Starter Pack.

It costs you 1501 Plex.

It gives you:
3x 30 day Omega
10x Skill Extractors
2x Multiple Pilot Training
650,000 skill points
a number of skins and suits
1x Expert 'boost' Cerebral Accelerator (this activates immediately on the character that bought the deal, +10 to all learning attributes, lasts for 10 days)


The numbers

Plex is currently selling for 5m, so the cost of the deal is 1501x5.032 = 7.553bn

costing up what i get:

  • 3 months of Omega i can get for 1200 Plex in the New Eden Store = 1200 x 5.032 = 6.038bn
  • I am ignoring the 2 months of Multiple Pilot Training because i don't normally Skill Farm
  • 10 Skill Extractors can be sold for around 400m each = 10x400 = 4bn
  • And for now lets ignore the Skill Points
  • The Skins and Suits come to a few sundry millions

So, the Deal gives me 10.2bn worth of items.

Or, put it another way, if i sold the Extractors i would get 3 months of omega for (6.038-4.0) = 2bn isk and then on top of that 2 Multiple Pilot Training Certificates and 650,000 skill points.

If i then skill farmed and assumed i would make 37.5 skill points per minute per character then i would get 37.5 x 60 x 24 x 30 x 2 = 3,240,000 skill points.  That gives me 6 skill extractors to fill (at 500,000 skill points each).  Each Skill Extractor makes a profit of around lets say 400m = 2.4bn.

and that then covers the rest of the cost of the Omega.  In other words, i get 3 months Omega for Free.

And some fancy pants suits and skins.  And 650,000 Skill Points to advance my training character.  And what ever was left from the Multiple Pilot Training certificates that i could not put into an extractor.

Friday 17 November 2023

Month end update - October 2023

I made 74bn profits in October 2023 of which 62bn was distributed on to the Oz Tank Show and the Eden Halloween give away.  Therefore, my wealth rose by 12bn isk to 1.170 trillion isk.

These days, the aim is to distribute my profits to the Oz Tank Show.  Hence, my wealth will barely increase and any monthly surplus will all be given away at some point.


Four Omega Accounts to pay for

Keeping 4 accounts on Omega cost me 8.2bn isk in October - i took part in one of the CCP deals which i detailed in this post - it was a great deal.  The 74bn isk profits comes after this 8.2bn isk cost.

I greatly suspect CCP will keep doing these Omega deals - and for me the 3 month deal is always the best.


74bn isk profits sounds great but there is a lot going on in there

Firstly, around three months ago i took part in a Omega-MCT deal which i discussed here.  Essentially, i paid 3bn isk for 3 months of multiple character skill training for all my Omega Accounts.  It was the deal of a life time.  i reckoned that would generate me 50bn profits at the time.  Infact, it generated me 41bn - looks like i did not trade in all my additional skill points.

Therefore, my normal profits were 33bn ( = 74-41) which is around 1bn per day.

Not too shabby but not the 2bn per day i was getting used to.

I find myself a little concerned, i should be doing much better in October and November feels slow also.


Also, good job in paying out 62bn isk to the Oz Tank and Eden Halloween Event

Again, there is a bit more to this.

I actually paid 67bn to the Oz Tank Show + 10bn to Golden CEO Zero Tax Market project + 5bn to Eden Trade Halloween Event.  That is 82bn paid.

However, in August and September i had accrued 10bn in each month to pay Golden CEO but he decided that he did not need his monthly 10bn until October.  Therefore, i wrote back the 20bn accrued which effectively meant my distributions in October were 82 - 20 = 62bn.

That makes the total distributions i have made to mostly the Oz Tank Show of 160bn isk in the last 4 months.

So, from July onwards i have made profits of 206bn isk and distributed 160bn of it.  I aim to distribute all the monthly profits i make,

As i write this, i have promised another 101bn isk in November in the November Oz Tank Show.


The basic numbers

In October i had sales of 334bn isk which breaks down as 83bn isk of skill farming sales + 251bn isk of normal sales.  I would have to go back to March 2022 to see 250bn of normal sales - that indicates why i am concerned.  October should not be this slow.

Item profits were 116bn isk which again breaks down as 45bn skill farming profits + 71bn isk normal profits.  That means that my normal item profits were 28% (71/250) which are at the upper end of the normal range.  So no problems on profitability.

Taxes and Courier fees came to 34bn isk.  Then add in the 8bn plex cost to Omega 4 accounts takes me to 74bn profits made in October.

Then 62bn distributions takes me to my wealth rising 12bn isk in the month.


Skill Farming

Over 3 months i trained all the characters in my Omega accounts with the aim of harvesting the skills generated form the 2 non-jita characters in each account.

in total i harvested 41m skill points.  I paid an average of 462m isk per skill extractor and sold each large skill injector for 902m isk.

Because i was always going to omega my accounts then i don't count the cost of this omega when thinking about skill farming.


What i am selling

Same as usual - Implants, Blueprints, ship equipment.

I have a rule that the minimum profits have to be 100m isk.  It is no use me buying items for 5m to sell them for 15m.  The profitability may be great but that wont move the dials.  That said, it is surprising how many items i can buy for 120m and sell for 220m.  At that isk level, players re-equipping don't care about spending an additional 100m isk to save time.

There is a competitor for the Blueprints in a few of my trading locations now.  Updating their prices daily.  Will be a battle of attrition.  But i can't give up and therefore it is a costly battle of attrition.

Implants are doing the best now and i often sell a family of implants at a time (i.e. the alpha, beta, delta, epilson, gamma and omega implant).


Lower than hoped sales over October

For the matter of the lower than hoped sales over October I suspect part of my problem is that i have done two things over recent months that have gone down the liquidity curve:

1) I have more focused on selling items where there is zero competition.  That tends to be the items that sell the least frequently, even by my standards.

2) I have not reviewed the market to look for new items to sell.  Therefore i have not refreshed by target sell list for too long.


Manufacturing

All but on hold for now - i don't really have enough time to devote to it.  I would love to find a system or process  that would allow me to have continuous manufacturing in place to make decent profits.


Planetary Interaction

Not gone any further and stopped the trial over the summer.

That may still work.  Profits in High-Sec are too low for me given the time required to make it all work.

Maybe low or null sec will work but that is a project for a another day.


Station Trading

All in Jita.  This is going ok though slowed down in October to 14bn.  Takes up very little time so i will stick with it for now.


Alpha Accounts

They have all now stopped trading.  Other than Arnon and Alentene, all the other locations show little promise at this stage.  I will keep them on but they will be dormant for now.


Non-Trading activities

Putting Manufacturing on hold and stopping Planetary Interaction all makes sense but is a little sad for me.  I would love to find another isk making activity that would fit into my schedule.


Current Wealth

Current wealth is 1.17 trillion ISK made up from:
  • Plex held as an investment 0bn ISK
  • Items in hanger for sale 41bn ISK
  • Items in hanger for use in business 11bn ISK
  • Omega brought forward 28bn ISK
  • Buy orders on the market 40bn ISK
  • items for sale 1.2 trillion ISK
  • less a 20% provision 244bn ISK*
  • ISK in wallet 77bn ISK

When i add up my wealth, I don't count assets I use in the course of my business such as ships, fittings etc nor do I add back any expenses such as skills purchased etc.  The wealth I disclose is made up of items that are ISK or are in the process of being converted to ISK or are used to generate isk that can be readily resold back onto the market.  Any ships or skills or fittings etc i buy are counted as expenses in that month.  The only exception to this rule is Blueprint Originals i use for manufacturing.  They are held at cost.

* I take a 20% provision against the items I am selling.  Eve calculates wealth by adding up the value of the sell orders hence it is possible to increase your wealth by buying an item for 100m ISK and putting a sell order for 120m ISK (in this case your wealth would increase by 20m ISK).  For me, I want my wealth to be calculated at cost.  I know that the value of my sell orders will likely fall over time as I update my orders downwards as competition reduces their prices before my items are sold.  Hence the 20% provision is my best guess as to what the maximum reduction I would need to make to my sell orders as a whole before they are sold.  In an ideal world I would value my sell orders at the value which I bought the items for.

Thursday 9 November 2023

Pearl Abyss Q3 2023 results

Pearl Abyss has released its Q3 results (July - September 2023).  The webcast and link to their presentation is on their website.


Overall



Revenues were down 12.7% Q3 2023 vs Q3 2022 and up 8.3% vs Q2 2022.

A small operating profit was made though this is still down 82.5% vs Q3 2022, and at the bottom line the net profit was still down 29.6% vs Q3 2022.

Focus on the Revenues and Operating Profits - they tell the story.  The Net Profits has all sorts of things going on that don't really relate to gaming.

The big news was the delay to the launch of Crimson Harvest.  It had been expected to launch in mid 2024, that has been pushed back to 2025.  This has surprised many people - Pearl Abyss was talking about the 2024 launch as recently as August at Gamescom.  Also, this follows on from prior delays to the game launch - so worries setting in that there is a problem.

This has pushed back other games as their developers focus on Crimson Harvest.  So DokeV now pushed back to 2026.

In all 2024 revenue hopes will likely need to be almost halved from where anyone thought they would be been before this update.

The net effect of this is that Pearl Abyss profits remain reliant on Black Desert and Eve Online and so profits will be very small, at best.  Black Desert continues to be in decline, so Pearl Abyss could see losses.

The share price fell 8% which makes it flat over a week - so the shares gave back what they had made on some more optimistic hopes from one broker.  That said, sentiment has turned negative on the shares.


What did Management say about Eve?

As usual, not much.

No hard numbers other than revenues (see below).

In the narrative they said:

"For EVE Online, we saw a slowdown in revenue in Q3 due to the base effect of the Viridian update we launched in Q2. However, we continue to see the strength of the EVE IP with new updates, and most importantly, the largest EVE Fanfest ever held to celebrate the 20th anniversary of service.

Notably, the event not only announced news about updates in the second half but also new titles in development, including EVE Vanguard and the EVE Galaxy Conquest. It was an opportunity to showcase EVE's new roadmap for the next decade, carrying on a successful legacy of 20 years in service."

"EVE will also be providing various contents to service. Most notably the new expansion pack EVE Havoc is planned to be released soon, which will support more diversified game play compared to the as-is with new story elements to add more fun to the game."

"We are also preparing for the soft launch of EVE Galaxy Quest, which we announced at Fanfest. EVE Galaxy Conquest is a casual mobile version of the EVE IP that combines exploration, diplomacy, and PvP combat. We're checking those metrics after the soft launch, with a global launch plan for sometime in 2024. Also EVE Vanguard, an FPS expansion pack designed to bring EVE from ship scale to human scale, is undergoing preparations to be made available to select users from December.

EVE Vanguard has been designed to create an organic relationship with EVE Online that goes beyond just playing an FPS game. It took the best parts of Dust 412, a different version of FPS of the EVE IP, and fixed the weak spots. And it has been designed to be both an expansion pack of EVE Online and have its own VM. We expect to see energy with EVE Online sales as well as increased sales of the EVE IP in the future."



Focusing on Eve online - the numbers

Literally, this is it:


In Q3 2023 Eve generated 16.0bn Won in revenues vs 20.2bn Won in Q2 2023 and 19.4bn Won in Q3 2022.


Focusing on Eve online - some analysis looking at the movement in Omega Accounts

Firstly, right off the bat, what we don't know is how the revenue is split between paid monthly subscriptions and other revenues such as paying for Plex, Injectors, etc.

But lets assume, for a moment, it is mostly subscription and the movement in revenues can be explained by pricing and volumes.

When thinking about is 16.0bn Won good or bad, we have to compare the prior year to get a fair comparison (i.e Q3 2022) because that irons out seasonal issues.

In Q3 2022 Eve generated 19.4bn Won.

We have to remember that in Q2 2022 CCP increased the subscription price by 30%.  Lets assume therefore that the Q3 2022 revenues had the full price rise in as does the Q3 2023.  Therefore, the difference between Q3 2023 and Q3 2022 will be currency and Omega Account numbers.

Quick check on currencies:




The average rates of Won vs USD, Euros and GBP moved +6%, -2% and -5% respectively between Q3 2022 to Q3 2023.  Lets therefore assume the overall currency effect was 0% - makes the maths easier.

Therefore, that implied that Omega Account numbers fell 17-18% between Q3 2022 and Q3 2023.  That is sort of what we estimated when we looked at the Q2 2023 numbers three months ago.

That is Omega Account numbers, not player numbers.  A player can drop Accounts or downgrade Accounts from Omega to Alpha but still remain a player in the game.


Comparing to pre-pandemic

We also know that gaming companies benefited from the covid lockdowns.  So it will be fair to compare Q3 2023 (where everyone is out of lockdown) to Q3 2019 which is the last Q3 before the pandemic.

In Q3 2019 Eve generated 14.6bn Won.

Since then the subscription price has risen 30%.

Quick check on currencies:




The average rates of USD, Euros and GBP moved -11%, -8% and -10% respectively between Q3 2019 to Q3 2023.  Lets call it -10%.

Therefore, in constant currency the revenues from Q3 2019 to Q3 2023 fell 2% (= (16.0/14.6) x (1-10%) -1)

However, between Q3 2019 and Q3 2023 there was a 30% increase in subscription prices and therefore that indicates that Omega Account numbers fell by 24% (= (16.0/14.6) x (1-10%) x (1/(1+30%)) -1)



The complete (translated) Transcript of the webcast is below:

Sunday 29 October 2023

Becoming a trillionaire - Fanfest 2023 Talk by Eden Trade

At this year's Fanfest, Eden Trade gave a talk on how he became a trillionaire in Eve, titled "becoming a tycoon".

Well worth listening to, good slides, very open and takes 45 minutes.

The Journey started in 2019 and today Eden Trade is making 60bn isk profits per month and is aiming for 100bn per month.  He has 60 trade characters, so thats 20 accounts that be spends 40-50bn isk per month for Omega.


There are always three parts to this type of talk i enjoy

1) the strategy and the evolution of the business model from the start to today

2) the excitement of the journey as milestones are reached, the ups & downs and then the 1 trillion is hit.

3) future plans


The Strategy and Business Model

The strategy of Eden Trade is to create new market hubs in High Sec outside of the main trading hubs and to sell items that have decent daily volume.

He buys from Sell Orders in Jita, has the items couriered to his Trade locations and puts them up for sale for around a 25% market up.

He faces next to no competition and so has great sales and profit margins.

He is very open, he shows us where is trade locations are and what he typically sells (ammo is the second biggest item!, Rigs the highest, weapons in number three followed by mining equipment).

He goes through how his strategy and business model has evolved over time and a more recent inclusion of a data person will likely result in a further evolution of the business model to move away from items that don't sell.

And good slides on the lessons he has learned, how he chose the locations.

In summary, he is filling a gap in the market where demand clearly exists.  Like me, he exists because people will value their time highly and so will not make the journey to Jita to buy items if these items are available closer to them at a higher price.


The journey to becoming a trillionaire

Eden Trade takes us through 2019 to today, showing the ups and downs.  How he initially had investors that have since all been repaid.

Always exciting to listen to the point where a business model is bedded down enough to gather momentum on its own.


Eden Trade information

Eden Trade has his own youtube channel and discord server.

He is also an investor on the Oz Tank show (a show where Eve players pitch ideas, whether content of investment ideas, to trillionaires who then decide how much to contribute.

Monday 23 October 2023

Month end update - August / September 2023

Busy times, i was away for half of September.


Profits after everything including Plex

In August my profits were 39bn isk and in September my profits were also 39bn isk, after paying 8.2bn in each month to upgrade to Omega for another 30 days for four accounts.

August was a typical slow summer month where as September i was only around for half of it.

That said, October is proving to be a slow month which is surprising me.


Distributions made

From those profits i distributed a total of 55bn isk to the Oz Tank Show, making my total distributions made or due to the Oz Tank Show to 98bn isk.

At the start of October, i distributed or promised a further 77bn isk.

My aim is to distribute all the profits i make.

So, to put this in context in July onwards i have made profits of 132bn isk and distributed 98bn isk.  Then add in the 77bn distributed in October.


Total Wealth

Therefore, at the end of September my total wealth was 1.16 trillion isk.


What i am selling

Same as usual - Implants, Blueprints, ship equipment.

There is a competitor for the Blueprints in a few of my trading locations now.  Updating their prices daily.  Will be a battle of attrition.


Current Wealth

Current wealth is 1.16 trillion ISK made up from:
  • Plex held as an investment 0bn ISK
  • Items in hanger for sale 26bn ISK
  • Items in hanger for use in business 11bn ISK
  • Omega brought forward 8bn ISK
  • Buy orders on the market 51bn ISK
  • items for sale 1.2 trillion ISK
  • less a 20% provision 238bn ISK*
  • ISK in wallet 128bn ISK from which 20bn of Oz Tank distributions need to be taken off

When i add up my wealth, I don't count assets I use in the course of my business such as ships, fittings etc nor do I add back any expenses such as skills purchased etc.  The wealth I disclose is made up of items that are ISK or are in the process of being converted to ISK or are used to generate isk that can be readily resold back onto the market.  Any ships or skills or fittings etc i buy are counted as expenses in that month.  The only exception to this rule is Blueprint Originals i use for manufacturing.  They are held at cost.

* I take a 20% provision against the items I am selling.  Eve calculates wealth by adding up the value of the sell orders hence it is possible to increase your wealth by buying an item for 100m ISK and putting a sell order for 120m ISK (in this case your wealth would increase by 20m ISK).  For me, I want my wealth to be calculated at cost.  I know that the value of my sell orders will likely fall over time as I update my orders downwards as competition reduces their prices before my items are sold.  Hence the 20% provision is my best guess as to what the maximum reduction I would need to make to my sell orders as a whole before they are sold.  In an ideal world I would value my sell orders at the value which I bought the items for.

Sunday 15 October 2023

Plex / Omega deal - 3 months is great value

For the first time in a long time the 1 month Omega cost has been discounted from 500 Plex to 350 and the 3 month Omega cost also discounted from 1200 to 1050 (it had sat on a long term discount from 1500 to 1200 previously).

This deal closes on 17 October and is available on the New Eden Store.

The cost of the other Omega times had not changed from their long term discounts.

As ever, the question is what is the best deal and the answer to that really depends on how you use your ISK in the game.


The thought process for an ingame business to decide which is the best deal

For me, i operate an ingame business and so the answer is not as clear as it may first appear to be.

For example, if i chose to buy 3 month Omega for all my 4 Omega accounts i would be spending 21bn isk vs the more usual 23bn, if no discount at all is given, 29bn.  But the calculation does not stop at comparing the 21bn cost to the other costs i would have paid.

I need to ask myself what 21bn invested into my business would have done.  Maybe the answer is just to take the 1 month deal for now, who knows.

Fortunately, i can work this out by asking myself the question of what my business would need to return each month if i decided to invest in the one month Omega each month instead of taking the 3 or 6 or 12 or 24 month deals:


The key column in the table above is the last column.  This tells my what my monthly return on my business must be to do better than taking the Omega deal.  (the working process is at the bottom of this post).

The clear winner is the 3 month deal where my business would need to do better than 51% returns each month - that is unlikely to happen.


The calculation process

What i do is compare two assumptions.  Lets use an example of the 3 month Omega deal:

If i go for it then i would spend 5.1bn isk per account vs the normal cost of 7.4bn isk, so a saving of 2.2bn isk for what is a 30% discount.

However, i must also compare this to taking that 5.1bn isk, buying a one month Omega and investing the rest in the business.  Then taking buy the next month Omega the following month from the profits and so on until the end of month 3.  For this to be a better use of the isk i need to work out what the monthly return needs to be - in this case for the 3 month Omega it is 51% each month.