Tuesday, April 30, 2013

Odyssey Nullsec Industry: Quick and Dirty

Got a new tutorial in the works, but wanted to take a few minutes to bang out some big-picture responses to the Odyssey mineral changes.  I also point at my (amateur) reaction to the R64 moon changes, and TMC's much more elegant/informed reaction to all the material changes, thanks to Mynnna.

+Doyce Testerman posted up an expanded version of the "Creation v. Destruction" graphic featured at the EVE keynote, and I was inspired to write some more words on the subject:
Image source: CCP

0.0 Industry Buff Has Arrived

This topic was pretty hot this fall.  I wrote some words on the matter, again from my T2 perspective at the time.  But as a brief TL;DR
The problems facing null industry are many faceted.  Material supply and outpost limitations were two parts of that problem.  There are more issues when it comes to bringing T2 production out to the warzone, leaving freight-from-HS as the more desired solution.
The meat-and-potatoes, as I see it?  This is an excellent first step.  By improving low-end volumes locally, and vastly improving outpost hardware, this goes a very long way to improve the industrial picture.  It's starting to look like a well-implemented plan to drop outposts strategically for carebear contingents could see some real successes.

The other part I see here is a great start toward farms-and-fields.  By incentivizing people to utilize player-owned outposts as manufacturing hubs puts more carebear skin in the game and makes conquering that resource a painful (but avoidable) blow.  I have yet to do any real number-crunching, but it's giving me hope to try whereas today I wouldn't even consider the proposition.

- BUT -

These improvements really make the T1/Capital picture juicy... but still leaves a lot to be desired for T2.  And I'd argue that the T2 module stream is just as important as the T1 hull stream.  Also, I'd argue that there will be an "unintened consequence" where traditional compression drops the price of low-ends in empire significantly... but that might be a good thing.

There are a lot of problems with the T2 paradigm that don't fit well into a null-bear strategy, and maybe that's "working as intended".  The primary problem is that moon-goo is regional, and you won't be able to source more than a few advanced-materials locally.  If you're stuck shipping anyway, why bother taking the extra risk of DIY when you can just ship in the final products?  Also, Invention is centered around high-volume, low diversity.  You'd still be stuck exporting the majority of finished products.  Lastly, datacores are an empire product, once again requiring shipment. This leaves "ship it" three votes ahead of "build it".  Especially when logistical effort is really tallied.

- But, BUT -

I don't want to pooh-pooh the whole picture.  Odyssey gives us industrialists the first REAL chance to carve out a player-owned factory-fortress.  By dropping a few outposts, strategically, deep inside your controlled territory, you could do some really interesting work.  T2 would not be out of the picture, and might be a great way to leverage moon revenue and put the plebes to work.  There's still a problem of POS being a little too squishy for my taste, but I think the tools are being rolled out to give a damned good roll of it.

This is just a first reaction, and no real number crunching has been put behind it.  I am intrigued by the actual mechanical feasibility.  More thoughts soon(tm)

Monday, April 29, 2013

Agile Production

Always remember the core goal: Make the most ISK for the least effort

The original plan(tm) looked like this:
Fill out accounts (4x) with 3 characters in this orientation:

  1. Ship builder/inventor (11/11 slots, ship invention skills at 5)
  2. Module builder/inventor (10/10 slots, all-4 research skills)
  3. Ammo builder/research bitch (10/10 slots, all-component MFG + limited science skills to 4)
This has not worked out to plan for the following reasons:
  1. Ship build budget/character is too large for the margin
    • Too easy to cross 4B/wk/char in investment
    • Component build step more intensive than anticipated
  2. Module Builder
    • Everything a-ok :)
  3. Ammo builder
    • Ammo margins have fallen from 250M/wk/char to <100M/wk/char
So there is a confluence of effort, buy-in, and margin that are all forcing me to reconsider the methods I'm using.

What Do?

I am left with a more dynamic problem than originally expected.  Instead of trying to match my accounts into a paradigm, I really need to follow the market demand instead.  Also, I need to do more to match my stated goal instead of just repeating the same "good bets" hoping they stay good.

New goals:
  • Grow buy-in pot to 15B
  • Shift existing "module" characters to "ships"
  • Shift #1 into sekret project (different accounting)
  • Focus #2 into heavy ship production (60 cruiser hulls/wk)
  • Upgrade "ammo" characters to "module" and round out their skills to allow invention
  • Find useful monthly kits for "main" character
    • Get personal JF finally?
This should achieve my goals by moving my "daily" work onto the third-tier characters, and "weekly" work onto my second-tier characters.  Unfortunately, to run this new layout, I have to bump my buy-in budget from 10B to 15B.  Also, my cycle time might increase a couple days, but this is small consequence with my current activity being so lack luster through April.


Oh lord May is a helluva month here IRL.  Getting married, hunting for new work, prepping for "sekret project"... It's going to be fast and wild.  Trying to spread my cycles a little wider over May as a means to hit full-steam right after Odyssey lands.  But I am weary about the work required to match my pace so far as EVE heads toward the rather infamous summer doldrums.  May/June have historically been terrible months for me on the industry front, and summer break tends to be mediocre.  Hopefully between the moon shakeup, and prayers for a new great-war, industrial volume will stay strong through the summer.

Otherwise, all my IRL plans come true the same time, and I too go dark for the summer.  No way to tell this far out.  There is still a scenario on the table where I get more Prosper code done... but's it's kind of the depressing professional "Plan-R".

Friday, April 26, 2013

Odyssey Moon-Goo Shakeup

DISCLAIMER: I am a terrible speculator.  I won't pretend to understand the political/economic forces behind the final price fallout for R64-goo changes.  I only present the facts as they are today as a close-enough estimate for the future.

I haven't had time to catch up with the Fanfest Keynote yet, but me and my industry buddies have been wildly scrambling to figure out the fallout of the proposed changes coming in the next year.  Though the obvious is already running wild, there are a few more threads that have yet to become obvious.

With the material change dev blog giving the supply-side a huge amount to chew on, let's talk about the changes.

Speculation and Reactions

The simple reality here is CCP is trying to rebalance the "peak tech" problem.  I won't say "fix", because this is EVE and alleviating a chokepoint without moving it to a new product would be piss-poor game design.  The end goal is to move from a R32 moon product to a R64 moon product as the choke point.  This, I assume, will melt a lot of OTEC's economic might and take some of the wind out of the big Tech holder's sails.  The nerf-bat giveth though, and I anticipate Neodymium will take the place of Technetium.  If you really want to speculate further on political impact, I have to point at K162Space's map analysis.

But, my world is centered around T2 manufacturing, so what does this mean for T2?  Once again, this looks like a big shakeup for ships, and very little fallout elsewhere.  If you're in modules, pre-Odyssey will look a whole lot like post-Odyssey.  Anything that touches Capacitors, Microprocessors, or Reactors, expect to see a 10-20% cost boost.

The really interesting part is the new materials.  A new racial "composite" and ThuliHaf + ProMerc.  The new composites tie into the new secondary materials to get a balance of the 4 R64/R32 compounds: Neodymnium, Dysprosium, Promethium, Thulium.  The idea being that Composites will require control of opposite sides of the map to monoploize.

Maps credit K162space!

Gallenium: ThuliHaf + Crystallite Alloy

Matarium: Neo Mercurite + Fernite Alloy

Amarrium: ProMerc + Rolled Tungsten Alloy

Caldarium: Ferrofluid + Titanium Chromide

Don't really have time to analyze the alchemy path on this one.  All I can say is today the alchemy reactions look pretty even with the traditional path.  Again, speculate at your own peril.

The Bottom Line

But, in an effort to be prepared, I could not resist building another spreadsheet.


I threw together the new products, the changes to components, and a few gross dials to be able to come up with some ballpark prices for ships.  I also had some help from Mynnna on his anticipated price points.  Using today's margins + proposed changes, I can tell you right now we're looking at a 20% increase across-the-board on T2 ship prices.  Speculators will probably drive the price a little wild until Odyssey hits, but I expect oscillations to settle rather quickly (~2wks-1mo) as speculative stockpiles cover the gap until new materials hit the market.

I think the biggest swings are obvious if you do the math... but I might be over-estimating the bulk of market makers on this one.  I have formulated my own plan to cash in on Odyssey, not that I'm sharing!

Though, remember this is EVE:  Take free information with a grain of salt :)
Reality Distortion Field

Thursday, April 25, 2013

Paradigms and Perspectives

I've been reading a lot of Merchant Monarchy lately and mulling over our polar opposite perspectives.  I've never had a taste for margin trading, so perhaps our methods are meant to be opposite.

The War on the "No-Lifer"

This is an admirable goal, and one all traders should strive for.  Diddling on the 0.01 ISK game is irritating, and though there are methods to combat botters, playing the small-change game is silly.  

I personally am in the camp that "game mechanics reward this behavior".  Half because trying to play otherwise is doing more damage to your bottom line than anyone else's (on the short scale).  Half because those who think they know better usually overestimate their skill or intuition.  I've been in many a market where someone did irreparable damage to a margin because they were sinking the price on too much volume.  I've cleaned out orders to spike prices.  There is an art to margin trading, and I have never been able to make that playstyle work to my satisfaction.

But the theme is admirable.  The goal in any ISK generating endeavor should be minimal effort for maximum return.  If you're babysitting 100's of orders trying to keep ahead on the 0.01 ISK game, you're gonna have a bad time.

The "Sheep"

Again, our philosophies diverge.  Personally, I try to follow the herd, the mentality being "make hay while the sun shines".  I get the general consensus that being in the herd will lower final returns vs being on the cutting edge, but when it comes to :effort: vs ISK, I have found it's great to blend in with the sheep.

I understand that participating in the herd this way makes me liable to run off the cliff, which I have done.  But my personal philosophy is closer to "fishing" than "herding".  I use my tools to take a look over the whole spectrum of possibility, then zero in on the trend of the week.  I usually miss the peak, but when the margins are this wide, there's still plenty of ISK to be made.  As long as I'm near 5% of the peak, I count it as a win. Mostly because chasing the edge of bubbles would lead me to madness!

Being a manufacturer, I am absolutely playing either a predictive/speculative game or a follow-the-leader catch-up game.  Thankfully, the cycle times on T2 and the costs associated with broad-base production give me an edge when I can quickly switch products while my competitors languish on the wrong product.  Also, having a large operating purse gives me the ability to change directions on a dime, rather than being stuck to worse products.

Another advantage I have is hiding in the crowd gives me the fastest path from product-->ISK.  By participating in the middle of any particular market, I can nearly guarantee my predicted margins and quickly cash out.  Though there are a ton of places I could technically be making more ISK, I avoid them because the market velocity is not on my side.  By hiding in the herd, I can quietly milk ISK out of the market and neither turn heads nor fall victim to price adjustments out of my favor.

To abuse another cliche, "I don't have to outrun the bear, I just have to outrun the slowest friend"

Can't Argue With Winning

At the end of the day, as long as you're making money and having fun playing the game, who can say you're doing it wrong?  This is the nature of the sand box.  My method is (nearly) perfect for my goals.  I'm cashing out billions per week, and my operating purse is at a suitable scale to allow me all the flexibility I need.  

Would I love to be ahead of the curve?  Absolutely!  But IRL is putting a terrible damper on my ability to build new tools.  If I can get better visibility into perspective products, specifically ships, I should be able to improve returns.  Regardless, I need to find something to help ride out the summer doldrums which are quickly approaching.

Also, if I may Pull a Johnson.  Working on a shiny-new-big-awesome-sekret project.... SHHHH, I can't tell you about it yet.

Wednesday, April 24, 2013

More Notes On Stockpiling

I've written about my disdain for stockpiling before, I've even tried to write a guide.  Recently, I've been mulling a problem whose obvious solution is stockpiling, but I'm trying to resist the temptation.  Again, as a nod to Chella at Low Sec Lifestyle, I'll try a little stream of conciseness to illustrate the problem... maybe there will be a solution at the end.

The Problem: Hictors

I have a love-hate relationship with hictors lately.  On the one hand, they are a great T2 ship manufacturing investment because they serve a specific niche that cannot be replicated in any other hull.  On the other hand, they serve such a laser-focused role, they aren't consumed in extreme volumes.  This has made the margin erratic.  The internal conflict is compounded by the fact that hictors cost significantly more than the rest of the cruiser hulls to produce.  

What I imagine is happening is demand is spiky.  When a supercap brawl takes down a bunch of hictors, logistics guys backfill stocks.  This burst in demand drives the price skyward.  The burst in margin triggers builders to fill the market need to milk out that sweet sweet isk.  The problem is it can take 3-5d+ to go from "that's a good investment" to "cash out" regardless of your preparedness.  The higher the margin climbs, the more people rush to cash-in.  This causes, what I imagine to be, a collapsing wave.  Suppliers quickly outstrip demand and the price collapses, eliminating margins.

Usually, I would write off the product volatility as "too much risk" and ignore it, but I've tasted the sweet success of cashing out while the bubble was high multiple times.  This is a problem that can be solved, if I can just find the right method to approach the product with.  It's inherently obvious that my current practice of work-weeks/kits isn't the right tool for the job.

Stockpile, Stupid

The obvious solution here is stockpile the built ships.  The problem I see is you're fighting two market forces there rather than one.  On the one hand, you're betting on material costs, and on the other, you're betting on the price of the item.  Don't get me wrong, there are places this is a good investment, but I don't think ships are.  There are so many people participating in ship production, their prices tend to be tied strongly to a specific margin.  With material prices slowly sliding, and a personal expectation that component prices will take a dive with Odyssey, this is a terrible way to conduct business.  Lastly, velocity on hictors is TERRIBLE.  The whole thing makes me feel like I'm lining everyone's pockets except mine.

There are places to stockpile.  Personally, I stockpile invented T2 BPCs and at least 4x the T1 BPC variants.  This cuts 2-4d from the kit-to-market time, and the T1 BPCs help me back-fill quickly.  I like blueprints because the cost stays rather solid, and market changes only move the final product price single-digit percent.  Unfortunately, this still leaves at least 3d on the kit-to-market time, which means I need to get better at sniffing out bubbles so I can leap in and cash out quickly.

Lastly, there's a throughput issue to produce these hulls in volume.  First, it takes 2-4d to invent enough for a good batch.  This is matched by the time required to build the components, and add another 2 days for the final build.  In a perfectly-organized project, you can overlap invent/intermediate-build, but in that case it will still take you 6 days to go from "I should build that" to finally on market.  This is too slow for effective market milking.

Better Tools

Really, the answer here is get off my lazy ass and finish the tools I've been talking about for over 6mo now.  With a graph watching historical margin + better reporting into when large fleets get whelped, hictors would be a great place to really put my automated tool through its paces.

In the mean time, I will just need to add hictors to an "asynchronous schedule".  Instead of making them a standard part of my build, I should do a better job to watch prices/margins with my existing tools and pounce on opportunity when it arises.  This should be easy to do with my ammo builders in standby, but when I put them back to work, it will be tough to meet the component build to be able to cash out in big enough numbers.  Perhaps it's time to dedicate a character to full-time component building and extend my kit buys an extra week out.