I've been spending a lot of time looking at markets within world, and received the following account of the life of an ardent capitalist in EVE. I thought it too interesting just to sit in my in-box and so I re-print it here with permission. The author wishes to remain anonymous.
I've been playing Eve-Online for a year and half or so. The first 6 months, I believe, were fairly typical to most players. I started out with a couple of corporations, did a stupefying amount of mining ("rock grinding"). I too did some deep-space work. As they say, nothing beats the smell of rockets and incoming... I lost my fair share of ships and gear. Had great times.
I then went bohemian and became a solo trader. I still lose ships while plying my practice, however it is now just a cost of business. The texture of the wilderness has changed. The trader role can be convenient for some players. Traders just do numbers and travel the dark gloom of space.
First a clarification. By a "trader" I mean that I *only trade* player-consumables. Eve Online does have an NPC trading sub-game. But I don't do that sort of thing. I only deal in stuff bought and sold by players. As my grandfather on Sirppala used to say, if it ain't meat it aint worth chewing!
Most players who become serious traders, I think, pull their hair out eventually. But anecdotally there is a significant niche of hard-core types (< 5%?) doing this. Most are considerably more efficient than I have ever been or will be (or want to be).
I started out trading while a member of a corporation. Early on I was asked if I wanted to trade for the corporation. I declined, I thought that would have been more work than I was willing to underake. It is my understanding though, the truly remarkable Eve-Online traders come from such harried and valued seats.
I will outline the next year or so of my Eve-Online life below as a solo trader. I first must apologize to the readers for some deliberate obfuscation in the detail of this account. After all, it is my livelihood we're talking about :)
~~~~Phase 1. of my career:
When I started out trading I was hawking a potpourri of low-tech ship gear. My strategy then was to offer convenient goods for sale at inconvenient places and charge a hell of a lot for them. I'd buy really cheap in the core systems and distribute small parcels out in the isolated reaches w/massive mark-ups (an order of magnitude or two). So, I might buy Fizzle Wogs for 15k and offer them for 500k-1.5million. Believe it or not people did buy them, not many, not often, but they did. Volumes were very low. I surmised that the folks who did this did so because they were willing to pay a large premium for convenience. They could afford to, or in some cases perhaps, had no choice - they couldn't easily purchase items from higher security spaces.
I built up a significant network of stations, say well over 300, I think. It took a while. With those kinds of numbers, even if I only sold several units a day, it was very good cash for a noob. Sure beat rock grinding. Because inventories were minimal/cheap (wasn't going for volume sales) this was an easy gig for poor noobs to bootstrap into.
~~~~Phase 2. of my career:
Once I started to accumulate cash, I evolved my Phase 1. style, opting to go *vertical* and for *more volume* sales. I choose a small basket of mid-range ship gear types, all of it common but essential insuring a dependable demand. Then I created a whole value chain around these items: I'd buy minerals, manufacture the items, and then distribute them. By this time I had nearly 400 stations on my trading itinerary and had capacity to manufacture large lots of my chosen gear. To move this additional volume, I drifted prices down to, say, a factor of 2-5 over core system market rates. So the same 15k Fizzle Wog might now sell for only 59K. Still a good mark-up. Increased sales volume covered the lost margins/unit and then some.
While I did try to manufacture most of my goods, frankly, I'd always occasionally get caught out. Logistics is a tricky thing. So I ended up going to the market with some regularity to spot shortfalls. It is fascinating how some corporations clearly go for the "huge volume, low margin gig" They might have a stack of 1000 Fizzle Wogs on sale at Jita for an epsilon above costs. Maybe they are onto the big numbers game. My racket was different...
When I first started out in this Phase, the cash profits were most impressive. For some reason I thought trade numbers diminished towards the end of the period. I loosely correlated the change (fairly or not) to some apparent adjustments made by CCP to economy (e.g. ISK supply, summer 2004), but I'm not sure.
I don't remember what I earned overall except vaguely, so much of it went and still rests in inventory forgotten-and-to-be-rediscovered. But I will guesstimate that easily *many* billions of real ISKs (beyond replacement inventory) went through my fingers. I had such a large network in play that it was a total numbers racket - something was selling somewhere all the time.
~~~~Phase 3. of my career:
The gig of Phase 2 became unglued when CCP changed the rules last year and on the one hand increased the sophistication of the trading process, but on the other hand made it more restrictive. They introduced a trade technology tree which was interesting in its own right and enhanced one's ability to manage and tune market involvements. Good stuff. But they also nerfed players being able to sell across the same large numbers of stations one could have earlier.
What that meant was that to do the same quality of business one had to some how adopt strategies to optimize returns on a smaller pool of offerings (e.g. I currently run my trades over < 160 stations). For a long time I continued with the same approach as (2.) except over a smaller pool of trading sites - I realized this was suboptimal, but I enjoyed the pipeline I setup for myself and kept myself motivated by trying to min-max my stations to optimize my yield. I did okay, nothing more, just paid the bills. I was playing pretty irregularly too.
~~~~Phase 4. of my career:
Recently, having taken more interest in trying something else - I've jumped into a pure arbitrage strategy (no manufacturing, no research, nothing but...) of a very select basket of high ticket items. I won't name them or name the precise procedure of computing my arbitrage. (Not while I'm playing the game :) But I will say that I rigorously and constantly weed and reseed a small number of core stations where I sell at (drop them, or change inventory) based on market signals. I also have lower-priced goods which I distribute more freely which I believe provide good indicators for higher end items I work with - yes, test marketing is born. The downside for most people with this gig is the huge capitalization required. In my case I had a great deal of cash, so it was an easy transition. To date, the returns are impressive, but ah, the inventory ...sooo much of it, sooo expensive. No more will I say, the experiment goes on.
There is a great deal more to investigate. Much of it is with regards to transportation. A great deal of it is with the markets themselves. Of the latter however I'm mute.
The transportation problem is a challenge in its own right. How to efficiently organize a transportation network and how to run goods more reliably through pirate waters roughly characterize the dimensions of this space. For example, it took me a long time to work out four standard ship configurations which i use and preposition liberally a number of places. The latest addition are souped up BBs to run gate gankers.
Its a rat race. But someone has to do it.
~~~~In the tree-line of the future:
At some point I plan to retire from trading. Once I have my stable of ships (all of 'em, everywhere :) and 10 billion ISKs in cash (and golly knows how much left-over inventory that will be, for my pension :)... that is my goal. I will rejoin my old corporation, join the security wing and become a pure fighter jock with a lot of expensive gadgets to try out in defense of the tribe. Muahahaha.
Oh yea, and hope springs eternal by then I will have more time...
I just got the game a few days ago, and while waiting for my skills to advance, I've been mining, and having some minor (very very) minor success at trading. I believe I've been using what the anonymous author referred to as the NPC trading sub-game. I think. Well, from what I can tell, it's that certain stations will set seemingly random prices on items (mostly industrial goods), and a wary trader can make a relatively small profit running stuff back and forth. The reason I think it's NPC is that the prices shift on their own. It could be a mix between player set buy prices and NPC station prices, I don't know.
Regardless, it's time consuming and not very profitable unless, as the author noted, you have enough capital to cover the initial purchase price, as well as a decent hauler if you're going the Huge Volume route. I really don't have much of a choice at this point because the low volume items tend to cost more ISK than I've ever had... just for one item!
But, as my cargo capacity increases, my margins increase slightly. Hopefully I'll improve as my skills move up. So far, though, it's a good way to make a few bucks while taking a nap!
What I'd really like to see in Eve, and just kick me in the head if it's there and I just haven't noticed it, is a real stock exchange. Now that I could play.
Posted by: Psyae | Oct 18, 2005 at 10:32
Being a producer in EVE is indeed quite rewarding and the best thing is, one can follow a producer career as a side business, constantly earning money over some weeks even if one is offline.
Two days every fortnight for producing and putting goods in the market, and the remaining 12 days doing some missions, PvP or whatever.
Being a producer myself, I love EVE for its sophisticated, player-driven market.
Posted by: DeltaTango | Oct 18, 2005 at 11:42
Reading this article brings back to mind "The Great Scam" by Nightfreeze - I'm not sure whether the story was mentioned on TN before - and although it had more to do with the cyber-criminal aspects of the game, it pretty much painted a picture of EVE's disproportionate economy.
I wouldn't know, personally. I'm not an EVE player, but matching up game economies to real-life ones is starting to hold merit. With gold farming and IGE purchases on the rise, and still able to continue, it's something worth looking into seriously.
Posted by: Kail Morias | Oct 18, 2005 at 13:52
I have been trading in eve for a while now, and the most interesting thing I've noticed is that I'm a lot more keen on free market capitalism now than I was when I started.
Understanding the way the market works in eve has helped me understand how it's supposed to work in real life, and why it sometimes doesn't. I'm a big believer in games as education tools, and this seems to show off the strengths of that side of gaming.
Posted by: Lacero | Oct 18, 2005 at 14:58
As the lead game designer of EVE, I thought I'd clarify a few points:
The market works in a similar manner as the NASDAQ stock market in terms of order matchmaking, but is really an exchange market.
We have always envisioned to add a real stock market to the mix, i.e. trading with shares of corporations, but for that to work we need more public auditing controls, such as the the SEC in RL, because otherwise it will be far too easy to hype up stock prices without any real value behind them. We are working on that.
Other things that we are introducing are economies of scale into manufacturing, which typically introduces a lot of complexity in the economics (at least in real life). We are also considering futures, which could make life for manufacturers a little bit more stable, but also opens a lot of opportunities for speculative behavior.
From out point of view, the more complexity the better, as it turns the economical landscape into true dynamic content, that can be explored and capitalized by players that like that kind of stuff, though they might only represent a small portion of the community.
Posted by: Kjartan Pierre Emilsson | Oct 18, 2005 at 21:18
Interesting article. The development of the business looks like a compressed cycle most non-service business goes through.
Starting from engaging in niche markets and then expanding to serve a larger addressible market and then going completely virtual and "outsourcing" all the physical components of the business. And then cashing out to a life of virtual financial freedom.
Interesting.
Frank
Posted by: magicback (Frank) | Oct 19, 2005 at 01:45
Kjartan,
I've tried implementing stocks in "corporations" that I created in other games (SWG, NWN, etc.). The main problem I ran into was the most obvious one. I could take everyone's investment and run, suffering absolutely no consequences. Well, besides being shot on sight. So very few were willing to invest, and most of those were people I already knew.
You're on target with a stock exchange needing some sort of regulatory device to give assurances to the investors as well as punishments to those trying to dupe the investors. Without it, you'll end up with one of two situations: 1) no one will invest, or 2) you'll have another Black Tuesday (US stock market crash of 1929).
I'm curious to see how EVE will handle the situation. It would also be interesting to see how much player on player regulation could exist and still keep the market protected.
I just hope EVE developers realize that "bad" investments are not "illegal" in and of themselves. Just because a multi-million dollar/pound/credit/isk investor loses all of his money, because the corporation goes belly-up, doesn't mean he should be refunded his money or even necessarily get his day in court.
Securities are very complicated, especially when applied to a variety of corporate structures without other regulations to keep them in line. I can see how stock selling could be simplified: base stock value on corporate assets, modified by limited variables such as distance from corporate holdings, popularity, number of members, etc., and then allow stock to be traded just like goods in the current market. I can't wait to see how EVE makes them more complicated.
Anyway, if you need any rules or regulations edited, spiced up, or just reviewed, let me know.
-Psyae, Esq.
Posted by: Psyae | Oct 19, 2005 at 09:57
Kail mentions the "Great Scam" by Nightfreeze. For those unfamiliar with this it's available at http://static.circa1984.com/the-big-scam.html
We've talked about it before: http://terranova.blogs.com/terra_nova/2004/08/an_intergalacti.html
And the inimitable Clay Shirky has a great discussion about it too: http://www.corante.com/many/archives/2004/08/17/the_great_scam_reactions.php
Posted by: Dan Hunter | Oct 19, 2005 at 10:27
So what happens when RMT meets an EVE-Online stock market?
Posted by: Evangolis | Oct 19, 2005 at 15:00
Eve Online has a policy against RMT transactions, so from that point of view, I guess you'd get warned or banned. ;)
Maybe I'm simplifying things too much, but under the assumption that if you accept that RMT occurs, then game wealth is in some sense just a transposition of real money, isn't this seperable into the two questions of "How does RMT affect wealth in the game?" and "How does wealth interact with the stock market ingame?". The first is the same basic question that people have been looking at for a long time, and the second is the same question everyone ingame and the designers need to answer in the first place, not just those involved in RMT.
Psyae - I know of at least one player who made a lot of his cash just taking advantage of people who enter escrows incorrectly ingame (like making ones that cost nothing but aren't correctly restricted to just one character to claim). I don't think anyone's ever been reimbursed for those, or for buying 1 unit of Tritanium for a million isk or any other bad investment (like the scams). Since launch, Eve has pretty much had a policy of "buyer beware" wrt ingame trade.
Still pondering how you could get around the fundamental problems with an open ended PvP game and stocks though.
Posted by: Daniel Speed | Oct 19, 2005 at 15:59
Start by listing what you consider problems.
Posted by: Psyae | Oct 19, 2005 at 16:58
How do you define the value of a good for the purposes of this exercise? New original blueprints in Eve are often traded for billions of ISK after auctions on the forums, but these are low volume trades and completely defined by player supply and demand. What would stop you, if you had sufficient cash and an item not traded in large quantities and the value was determined from player trades, from inflating the value of something artificially through trades or transactions with alternate characters (like by creating a buy order for a ridiculous quantity then choosing to sell immediately to that)?
If you assume that people can still clean out the assest of a corporation through theft, then this is also possible through alts (and it's nearly impossible to tell the difference). What's to stop you getting a sufficiently large set of corporation assets, then some investment, then clearing out the corporation. If you stop people from removing stuff from a corporation with stock, how do they do anything with the assets of that corporation, which may well include the assets they need to move and use to make money? What's the difference between player X who steals everything, and player Y who takes the investment cash and the assets and runs off to form another corporation, possibly with a disposable character as CEO?
I think what I'm trying to say, is that any which way you look at it, there's a whole load of valid ways you could lose money or assets through bad choices, yet at the same time, almost every one of those can be exploited to syphon out the asset value of a company. Since they mirror valid methods so closely, it's extremely difficult to just flat out prevent the extraction of the value of a corporation without just locking the whole thing down completely, which would make the whole thing counter-productive. You even get issue if someone's moving a whole load of valuable assets in a ship and it gets blown up and the assets claimed by someone else.
The whole question of the lack of individual consequence through multiple accounts and characters, is at it's root, a big hurdle in any system designed for a massively multiplayer game.
Posted by: Daniel Speed | Oct 19, 2005 at 18:30
I agree. Regulation is irrelevant when there's no consequence.
I wonder how EVE expects to get around this fundamental problem.
Posted by: Psyae | Oct 20, 2005 at 09:26
Here's a suggestion to beat up on for how corp investments might be protected in EVE Online: Allow corps to be either private or public.
If you go public, you can sell shares in the corp to raise funds, but the cost is that you (the CEO) change from being the owner of the company to being a caretaker. You give up some control in order to gain access to cash for capitalization.
Going public would impose several changes in how the corp is run:
* regular public "filings" of corp assets
* board of directors (n% of corp members) elected by corp members every few months
* CEO chosen by majority of board members
* financial transfers must be approved by majority of board members
The advantage of having to get major decisions approved by a board is that this makes it tougher for someone to absquatulate with all the corp's assets. The down side is that it slows down the decision-making process, which can make it tougher to respond quickly to opportunities. On the other hand, a certain amount of deliberation before spending shareholder assets is not a bad thing.
Naturally, if you prefer not to have these limitations imposed on you, you can always keep your corp private.
...
This isn't a perfect solution. The assets of a public corp could still be stolen if enough board members collude to do so, but of course that's why a potential investor always checks the public record about a company (including its board members) before making any substantial investment. Corps whose board members were all created a mere week ago would probably not be highly rated by analysts....
(And speaking of analysts -- who would these people be? Could perfectly "honest" analysts be made of in-game NPC agents? Would that be fun? Or should players be allowed to be in-game stock analysts who get to make buy/hold/sell recommendations? If so, who will analyze the analysts?)
Obviously this suggestion is modeled on real world corporate organization. In this simplified form, I think it might also work for EVE Online, but I'd like to hear what others think.
--Bart
Posted by: Bart Stewart | Oct 25, 2005 at 20:27
I know this thread is getting on the old side. I mean, who wants to read what someone wrote a week ago, right? However, I think Bart has a promising idea. I've always espoused self-regulation as the key to Eve Online. This allows scammers to get away with what they do because they outsmart someone in game, without CCP acting big-brotherish and smiting the scammers. When people complain about this, I respond: well, be careful next time, put a bounty on X's head, and use your resources to keep those kinds of people out of your funds.
Well, unfortunately, regardless of potential self-regulation, virtual life has a fundamental flaw: multiple characters. The closest equivalent in real life would be identity reset (get facial reconstruction, someone to draw up new papers for you, skip town, start a new life). Of course, we have ways of even tracking people that do that. Given enough time, money, and effort in Eve, however, you can have an infinite number of alternate characters who can infiltrate, conquer, transfer all the stolen money and assets to an ALT, and then disappear.
What's this mean simply? No accountability whatsoever. This is a huge flaw in Eve (possibly impossible to fix). It punishes those of us with little time, and not enough money or desire to buy multiple accounts and multiple computers which would allow us to pull of some great scams. Those people get away free. If, for instance, my Eve character built up some money and reputation, and performed a scam, I'd literally have to start over from scratch if I wanted to keep playing without a bounty on my head, or being boycotted.
So, there's accountability for the small-time crook, but none at all for the professional con-man.
Apply this to the stock market. First, in real life, just google "Enron" to see how accountable we are. There's jail time and huge fines involved. And if you screw up, you can't go, ah well, and hop to an alt.
Now, in game, just about everything you can buy or sell in game can be inspected. If someone puts an item worth 100 isk in escrow, and lists it as being an item worth 1 million isk, and you buy it, too damn bad, you should have inspected it first. Because you had the opportunity to!
We already have an aspect of the game that at least partially lacks inspectability. That's trust. It's giving people access to your assets, and trusting them not to run off with them. Sure, you can do your own bit of research on the person beforehand, but it's not always 100% reliable. So, you have to gamble a bit, as we do in real life. And there's little to no accountability if your CFO runs off with all the corp's money.
With stocks, you take it a few steps further. You're asking people not even in a corporation to trust everyone in the chain of command in that corporation. Although I had high hopes about stocks in game before, I'm just not sure there's a way CCP can develop a way to induce potential investors to buy corporate stocks.
There is, however, one thing I can think of.
Liquidation. This is a little complicated so, stick with me. Let's say a public corporation disbands. As soon as it does, a certain amount of money, a percentage of the invested stock, previously hidden away in escrow, is automatically distributed to shareholders. This escrow account starts off low, but builds up as the corporate account builds up, therefore essentially creating "insurance." However, it's limited to a certain amount, so, for instance, you could never get more than 50% of your purchased share value if the corporation goes under, but at least you get something.
Now, couple that with a risk/return formula that rewards those who invest more with higher yield, and rewards moderate investors less. However, moderate investors will have a better guarantee of a return if the corp goes under, since the higher level investors will exceed the "insurance" cap. This will allow for everyone to play the market, but give some people the opportunity to play hard (with high risk), and possibly get some good return. And everyone can do this without basing all of their decisions on the accountability of a single corporate executive.
Of course there are a few logistical concerns. Like, the purpose of a corporation selling stock is to raise capital so it can use that capital to make more money (thus increasing corp overall value via assets, and therefore increase stock prices). Well, if there's an "insurance" backup on even a percentage of the stock purchased, that's money the corporation can't spend on purchasing assets. This can be solved a number of ways (I'll discuss one). It could work on a "timer" of sorts: an investor buys 1 share of X Corp stock for 100 isk. On day 1, there's no insurance (i.e., if the corp goes under, investor loses 100 isk worth of stock). On day 8, there's 5% insurance (i.e., if the corp goes under, investor gets 5 isk back). This keeps going till 50%, and is applied the same way for all investors (i.e., if same investor buys another share on day 8, for a week, there's no insurance on THAT stock).
This does a few things. It makes it so the corporation has more initial starting capital. It makes it so that investors have a better reason to keep their stocks longer. It makes it so that investors have some fallback. It makes it so investors can buy some stock in a corp, wait to see what the corp will do with it, then buy more if satisfied. And it encourages the corporation to make money more quickly to cover the cost of insuring the stock.
Where the risk/reward comes in for prospective big-time investors is finding a public corp early on and investing a LOT of money in stocks. If the corporation does well, the value of each share will increase, and the investor can sell the shares for a great profit. The average investor won't have the capital or desire to risk so much, and will thus get a smaller return. Of course, if the corporation goes under, the smaller investor comes out closer to even, and the big-time investor may lose big-time. But that's the fun of stocks.
There is, however, the issue of "majority" shareholders actually "owning" the corporation, and therefore being able to vote for directors, or even disbanding the corporation. This is probably the trickiest hidden problem with the whole stock exchange idea, and should be addressed at length (new post, new post!).
As for analysts, I think Eve should incorporate both NPC and PC analysis.
Posted by: Psyae | Oct 26, 2005 at 10:37
Good stuff, Psyae.
At the risk of further beating on an "old" thread:
1. The problem (and I do think it is one) of people running multiple accounts -- and, even worse, of using multiple accounts simultaneously -- not only makes designing a stock system harder than it otherwise would be, it seems to be becoming an increasingly painful design problem for every MMOG.
a. Some (most?) MMOGs allow players to have multiple characters per server. (Even EVE Online allows three characters per account on their one server.) Do games that restrict characters per server (such as SWG) see a significant number of players purchasing additional accounts to get more characters on one server?
b. Why do players purchase multiple accounts? Are most purchasers of multiple accounts farmers? Or are most of them people who actually want to play the game for entertainment?
c. For non-farmers, I imagine the top two reasons for buying multiple accounts are "to level up fast" and "to try to dominate the server's economy"... but how is either one of these goals something a developer wants to encourage? How does supporting these goals of a few individuals make the game more fun for everyone who plays?
d. In other words, why do developers permit individuals to buy multiple accounts? Is it about the revenue? Or is there some reason why prohibiting multiple accounts is difficult or undesirable?
2. EVE Online allows three characters per account. How would that affect the kind of stock system proposed here?
3. What's to stop a wealthy corp from going into "corporate raider" mode, buying up corps just to liquidate them?
The notion of a wealthy player or corp being able to acquire a majority of shares in a corp (and thus presumably becoming able to control the board to sell off the corp's assets) is fascinating. Would this be a Good Thing or a Bad Thing?
From a pure economic POV, some level of ownership volatility is a good thing. It's another mechanism by which capital flows from (relatively) low utility to high utility, increasing the value of the entire economy. Every player benefits from that.
But "corporate raiding" (and, to a lesser extent, hostile takeovers) aren't as much about making an economy efficient as they are about quickly increasing someone's assets. From a high-level perspective, those behaviors aren't as valuable... so should they be limited or prohibited through code? If so, how do you accomplish this without also inhibiting the "good" takeovers that do move wealth from lower utility to higher utility?
What's more, EVE Online (or any MMOG that implements a stock system) is more than just an economy -- it's also an entertainment product. If you're the individual player whose corp just got liquidated after being grabbed by a corporate raider, will you shrug and chalk it up to your voluntary decision to take that corp public? Or will you feel abused by the rules of the game; will you be upset that the game's code allows very wealthy players to take away from you the corp you spent months building up?
In short, must a MMOG impose more constraints on how public corps can be taken over (through stock purchase) than exist in some real-world stock systems?
4. The U.S. accepts more of this kind of ownership volatility in its stock system than European nations. Given that CCP (EVE Online's developer) is based in Iceland, is that likely to affect how it implements a stock system? Should CCP tailor the design of their stock system to the expectations of some part of their player base? Or can the design of a stock system be considered purely from a technical point of view?
5. Could a MMOG stock be listed on a real-world exchange?
--Bart
Posted by: Bart Stewart | Oct 26, 2005 at 14:04
Bart, your questions are phenomenal, and quite on point. And I hope this thread will continue, because it's a dynamic issue that even the Eve developers admit is on the horizon.
Although I believe our questions deserve thorough analysis and possibly an entire website of their own, I'll tackle a few of your questions here, at least to incite (oh, I mean encourage) more discussion.
1:a: I know a lot of players who double or even triple up their accounts for greater access to in-game resources. However, compared to the masses, I doubt this is a "problem."
b: Various reasons, including what you've already mentioned.
c: I don't think developers "encourage" it. I think they realize that the vast majority of subscribers are casual gamers who want variety and even to attempt to restrict the number of accounts would be a detriment to "innocent" people such as myself who buy multiple accounts under one name for the purpose of allowing multiple people in the same household play simultaneously (Yes, that's exactly what I do, and I've never "abused" it).
d: See c.
2. Directly, it wouldn't. (or at least implications can be avoided). For example, if X account owns shares, and the account is not accessed in 90 days, the shares become null (free income for corp). As for corp executive accountability (my issue with the stock system), if an officer of a public corp does not do X (some required corp activity AT a corp office) at least once per month, then that character's corp assets roll back to the corp. If it's a CEO, the next in line moves up, etc. There are MANY other issues with multiple characters, but that'd take too much space here.
3. GREAT question! This happens all the time IRL, and there's a system set up to handle it. In corporate takeovers or mergers, the aggressor corp often offers the target's shareholders a "buyout" in which "A" corp will pick a good price giving a profit to most of "T" corp's shareholders, and if enough take the deal, "A" corp "wins" by being the majority shareholder. Those "T" corp shareholders that don't take the deal might end up with worthless stock if "A" corp dissolves "T" corp after takeover. The deal here is that "A" corp is not really any different from a private entity (a single player) with enough money to buy out the majority shareholders in "T" corp. So, the takeover scheme isn't really "bad" and it shouldn't be prohibited. The issue arises when the "A" corp targets JUST the majority shareholders, and ignores the minority. Does the minority have any recourse? Perhaps just the insurance I mentioned earlier. Again, good question.
4: A very insightful question that I didn't consider. I believe that they'll be modeling the stock system on the U.S. exchange, which makes it a bit easier to regulate loosely.
5: Absolutely not. To be listed on a real-world exchange, the corporation must be 1) real, 2) authorized to sell stock. Eve corporations, by all definitions, cannot be real, and cannot be authorized to sell stock. Of course, someone with a bit of ingenuity can come up with ways to create a real corporation that somehow can sell an "interest" in in-game assets, which theoretically could be sold on an exchange if the corporation registers correctly according to its location. The problem there, of course, is violation of the EULA and Terms of Use, and possibly other regulations and laws in respective locations.
Posted by: Psyae | Oct 26, 2005 at 15:21
I see we've slipped the surly bonds of the front page, but to add some final thoughts (because I appreciate the kind words):
1. I hadn't properly considered that there must be people who have multiple accounts just to give one to different family members. Thanks for reminding me about this perfectly good reason.
I do still wonder, though, whether that's the most common reason for having multiple accounts. I'd love to see this question asked by Nick Yee or anyone else, even if I don't personally know how you'd pose the question and potential answers without missing something.
2. There'd definitely be a lot of little questions that would have to be asked and answered in the design of a stock system for EVE Online. I can see them breaking down roughly into two categories:
a. Who's in charge? (rules for authorizing and removing CEOs, board members, etc.)
b. What can they do? (rules controlling how corp assets can be used/transferred)
These kinds of questions would relate to those for taking a corp public. For example, should there be a minimum membership size before a corp is allowed to go public? It seems like you might want to in order to simplify some of the "board of directors" rules, but what happens if a corp goes public and then its membership drops below the minimum membership mark? Do you let a corp remain public if it drops to, say, five members? If not, how do you force a corp back to private status?
And this is just a small sample of the things I can think of. I can definitely understand CCP taking their time in considering doing this!
3. Another aspect of how to design for corporate raiders is the notion of the "poison pill." Should a stock system allow corps to impose enforceable rules for themselves that make them less attractive to hostile takeover attempts?
Would allowing such rules wind up giving too much power to a public corp's leadership (CEO/board)? For that matter, would it add too much more complexity to the design without enough payoff? Maybe the risk of being swallowed up should/could be sold as part of the "fun" of EVE Online!
And then there's the big question: Could one corp buy up enough other corps to wind up being able to buy up all other corps? That doesn't seem desirable... but how do you prevent it without adding "inefficient" regulatory complexity?
4. To put this question from the player perspective: Do EVE Online's current and potential players truly want a realistic stock system? Or is what they really want a system that's unrealistic but fun in that it offers rewards without commensurate risks?
5. I didn't personally think that a virtual corp should be listable on a real market. But if a stock system is ever implemented in EVE Online in a realistic way, the question is going to come up -- I just decided to try to get ahead of the curve. *g*
It's interesting to speculate on what would be required to treat a virtual stock like a real stock, anyway.
--Bart
Posted by: Bart Stewart | Oct 27, 2005 at 14:05
#4: Ding!
I think that's the question of the year.
THAT is what Nick Yee should be researching, at minimum.
#3: It's the players (shareholders) that would prevent a monopolistic corporation. As for poison pills (great term, btw, brings back memories), I think that's perfectly acceptable (corp rules for itself), but should use basic game mechanics (self-regulation) to enforce. Honestly, I think this is a concept that's probably beyond the scope of the Eve developers' plan for a stock market, and it will end up being a series of patches implemented after some entrepreneurial players figure it out for themselves how to use self-destruction as a means of hostile takeover avoidance.
#5: Doesn't hurt to think ahead.
Posted by: Psyae | Oct 27, 2005 at 16:05