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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.


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.


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: