Thursday, December 27, 2012

Amazon Vs Mainstreet: The Null Industry Problem

Been fighting most the afternoon with @Mord_Fiddle on the #tweetfleet about nullsec industry.  You can read his blog over at Fiddler's Edge.

Though we disagree rather strongly on our particular positions on industry, it inspired me to bring up a new point in the ongoing "Farms and Fields" debate for nullsec.

The Goal

The goal is pretty simple: Bring industrial targets to the nullsec warzone. This would provide softer targets for enemies to raid, a reason for defenders to invest in their space (and its protection). A noble goal, and one I personally stand behind.

The Problem:

Supply is heavily Jita-centric.  People produce in high-sec, and final products are shipped to nullsec.  There is an organizational chasm between builders and killers.  The two halves work independently, and there has never been reason to challenge the arrangement.

This provides a few problems.  First is that nullsec operates without need for a defensible "home".  Second is the ever tightening spiral around a single trade-hub.  Both of these make the game bland and I agree both should change.

I could rehash what I've already covered, or the other proposals like "super-trit"... but instead let's look at a compelling analog.

The Analog:

The problem looks a lot like the IRL conflict between Amazon.com vs local Brick-and-Mortar.  EVE continues toward Amazon's offerings: a central one-stop-shop for everything you could ever want + easy shipping to the four corners of the galaxy.  This kills local economies and jobs, and the leverage Amazon has is incredibly hard to beat.

Now, before we start with the pitchforks and "NERF ALL THE THINGS", let's instead look at the parts and evaluate what they really mean.

Overnight Shipping

Though the current climate is centered around one distribution hub supplying everywhere does center on shipping, I don't think this is the crux of the issue, but a symptom of a larger problem.  

The current problem is that there is a painful inbalance between raw materials and finished products.  Either raw materials need to be compressed, shipped, and refined, or final products need to be shipped anyway to the waiting hands of troops.  Why bother with a heavy intermediate step when you're already shipping final product?  Disregarding actual cargo size or JF range, the compression rate is over 50x between products and their raw materials, you could eliminate JFs completely and not even touch this issue.

This is where the "super-trit" proposal gets its legs.  "If I didn't have to ship heavy trit [freighter can only fit ~75M trit per trip], I could build more in null".  I think the solution is simpler.  Though I'd like higher yield super ores for low-ends in null (+50% for Trit/pyre/mex) or an overall increase in low-end yield, I think reducing mineral volume by 10x will do better to solve the issue.  If the compression between raw materials and finished products is reduced, the balance shifts toward remote manufacturing.  This by itself does not solve the problem, but it does move the balance beam.

Best Prices Anywhere, Available 24hrs/day

Currently Jita is a gold standard for all products.  Also, the price differential between DIY and Jita market isn't terribly healthy.  T1 margins are razor thin to begin with, and the logistical hurtles to T2 manufacturing necessitate a heavy shipping step anyway.  For the trouble involved, you either are going to save very little or lose money by DIY.  

The DIY Value Add

My proposal here is nuanced, but humor me.  I think the root of this problem is throughput.  Namely, the time required for manufacturing T1 is near negligible.  

Today, a single manufacturer (given enough ISK) can produce far beyond the current global market volume weekly on the vast majority of products.  And this lack of bottleneck is the reason T1 manufacturing has no value.  If there is no "Bread and Butter" choice for production, and the only limiter is cash, there is no value to the time spent in manufacturing.

A quick run down of weekly single-character maximum T1 throughput vs current jita total volume:

  • 700 battleships per week (200 on market in Jita)
  • 2,000 frigates per week (1,000 on market)
  • 17,000 HAM launchers (1,600 on market)
  • 1,500,000 Scourge Heavy Missiles (2,000,000 on market)


Put the breaks on T1 production so that there is some intrinsic value in manufacturing.  Without scarcity, value cannot be added, and T1 provides no scarcity.  I do believe T1 should be faster than T2 (5:1 T1:T2 is my proposed value) but this focus on time being the scarce resource will push more people into private industry (POS) and provide a value difference between raw materials and final products.  By severely limiting throughputs, large volume or diverse orders will require teamwork.

Pair this with a fairer compression rate on minerals, and I think this would go a long way to changing the industrial atmosphere.  Adding complexity that requires teamwork, and gives opportunities to work within the current frameworks.  I'd also like to group these changes with a more mobile POS model, allowing for a "caravan" that doesn't need to be the purely stationary asset they are today... but my POS proposal will require its own post.

Risk V. Reward

This is a point I really have to lean on, and I think is overlooked in many industrial proposals.  Factories are expensive.  If they aren't expensive in equipment, they're expensive because of the work in progress (WIP).  As I said in my own Farms and Fields post, without castle walls to protect those infrastructure investments, the costs of shipping will always remain cheaper than DIY.  

It does boil down to "incentives".  People don't manufacture in null today because it's too easy to nuke the whole thing overnight, AND the costs of making the system work far outstrip the costs of shipping final product.  Even given a 50% reduction in time and materials, we haven't touched the core problems of security and logistics.  

I personally would love to see a means to disable production lines with raiding parties, but they would need to travel through a few layers of protections before getting to those factories.  And with titans and jump bridges making the ability to leap-frog so easy, and TZ warfare completely common place, I'm not confident in the current nullsec's ability to protect those assets.  Unless we can build castle walls, I don't see many new POS being brought to null for industry.

Some Notes on T2

Though I know CCP Fozzie is moving the conversation back to T1 hulls, there is still a significant need for T2 modules.  The material requirements for T2 are largely (50-80%) moon minerals, and their acquisition is designed to prevent any one entity from being able to effectively supply all those materials themselves.  This means there still needs to be a shipping step, and intermediate manufacturing.  

I don't think bringing "farms and fields" to null in the form of manufacturing will work without also bringing a contingent of T2 production with it.  And unless "peasants" are able to labor for those T2 components, there's no means for an efficient local source.  I like the top level concepts of moon mining, but with organizations like OTEC and the supply lines almost entirely passive, there needs to be a change.  My short term proposal is to move harvesters outside POS shields and make the process interruptable with subcaps.  But these steps only improve the moon mining mechanic, they don't contribute to industry directly.

I hope to have more T2 suggestions soon, but I fear it will need to be its own post.

6 comments:

Anonymous said...

I agree with the sentiments posted here. Bulk buying and hauling/shipping in is far too easy. I've never produced large quantities of T2 items in Null because of the material requirements involved. I've also never setup a POS network in Null because someone with 12 Supers can come in and destroy the setup after a few timers.

Anonymous said...

Why not a variable trading tax, which taxes based on the amount of ISK going through that system. Jita's taxes could be so large that trade there would be hammered almost to a standstill for some time, but that'd even out rapidly too. Ultimately, the tax should end up convincing sellers to go to less populated systems to sell in order to reap the cheaper taxes (and thus higher profits) or ability to sell lower for the same profits, encouraging a deal. Likewise, those who want an all-in-one sell/buy location have to deal with a huge portion of money going to NPCs. Sellers would no doubt attempt to shift some of this cost onto the buyer, attempting to reach the middle ground.

This is already sort of done with the offices and construction lines, where more convenient ones cost exponentially more (or in case of build slots, are taken for exponential amounts of time, holding up the build slot).

Yeah, it's negative reinforcement, but the issue of size of material to haul is nothing compared to the fact that building and buying are near enough equal cost in the general case. A steep tax on "easy trade" would both split trade up across larger areas AND insert a profit to building for yourself/your alliance by evading the NPC tax.

Anonymous said...

(That same profit justifying the risk of having POS networks, so long as the tax rate is correctly managed).

Unknown said...

I really want to avoid adding more NPC influence and leave the market up to the players. CCP proves time and again that NPC is a band-aid and will never be tweaked again. Also us americans hate complex tax system (or taxes at all).


Also, taxes solve a different problem. They remove ISK as a sink. And I don't dare tread on the "liquidity of players in EVE" topic.

I only focus on how to make the industrial systems better to foster the final goal of "industry in null"

Anonymous said...

When did farms and fields become so narrow a view to be industrial targets?

The original farms and fields proposals discussed on K-com were about targets, period. The discussions began with the nerfing of anomalies, and the general rule that you could earn your ISK in hisec or incursions (at the time) and not need to be in null sec. Farms and fields are "targets of opportunity" that impact the local residents, to give them a reason to come out and fight, rather than dock up.

Unknown said...

The solution is not purely industrial, but the focus of this blog is.

With the intended and agreed goal of moar carebear targets in unsafe space, these are my proposals on how to incentivize that through industry.

By no means is this a complete list nor magic bullet, but if S&I is under review from CCP, then I'd like to take the opportunity to really improve it for everyone.

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