The New Normal

Regular readers of this blog know that I am attempting to make a profitable enterprise out of a solo, casual industrial effort in high security space. Before the comprehensive revamp of all industry mechanics in the Crius expansion, released on July 22nd, I was making a very good income in-game, doing invention and Tech II manufacturing in a small player-owned starbase (POS) in high-sec. The Crius expansion changed the economic landscape in New Eden, by making industry more accessible to players, and at the same time, by pushing advantages for invention and manufacturing towards lower security space, to encourage more infrastructure development there.

Some cynical prognosticators predicted dire consequences as an inevitable result of the Crius changes, including an erosion of any meaningful profits for high-sec manufacturers, or an inexorable dominance of null-sec industrialists over all production in New Eden. So far, two months after the introduction of Crius, neither of these extreme scenarios have yet come to pass, much to my relief.

Though it is still too early to state with certainty what the ultimate results of the Crius industry changes will be to New Eden's economy, I see some initial trends, and am now forming some opinions on how a "new normal" is emerging for aspiring industrialists in EVE Online. In this post, I would like to share a few perspectives on the post-Crius environment as an independent inventor, manufacturer and tradesman based in high-sec space.

Margins Since Crius

What has happened since the release of the Crius expansion? First, as documented by CCP Ytterbium in a recent dev blog, general participation in industrial activities has increased by double-digit percentages across the board (except for Reverse Engineering, which still realized a healthy increase of 8%).

Industrial activity in New Eden, pre- and post-Crius - clearly, industrial job counts are up, across the board.

CCP devs also commented during the recent Alliance Tournament that this increase in industrial activity has occurred in all types of space: null-sec, low-sec, high-sec and even wormhole space to a degree. So, Crius has succeeded in stirring the interest of industrialists throughout all of New Eden, thus far, and not only in 0.0 as some had feared.

If this level of activity continues, this is both good and bad news. The good news is that more production means more products in the markets, which should keep costs low, a benefit for all players. For manufacturers, however, the increased supply means much higher market competition, which puts pressure on profit margins.

And indeed, I have discovered that my profits on my Tech II modules appear to have declined by about one-quarter to one-half. Before the Crius expansion, my gross margins on most Tech II modules averaged around 40 percent - today, they average a little over 20 percent, with some variability depending on the item sold and where I sell it.

In this regard, the cynical prognosticators mentioned previously have proven to be about half-right - margins have trended lower for high-sec producers, though this seems to be a result of more participants from everywhere in New Eden, rather than from a wholesale market takeover by null-sec producers alone.

Prices Since Crius

Just before the release of the Crius expansion, CSM member mynnna, known for his industrial expertise, wrote an interesting blog post which boldly forecast future trends of prices in the market, as a result of the Crius changes. Though it is still too early to make a final judgement on his predictions, it is useful to benchmark these against what has actually transpired, so far.

Note that I am using Jita prices and trends as illustrations here. Prices differ in other markets, as I'll explore further below. But as the dominant market in New Eden, Jita provides a good indicator of the general price levels in New Eden, with the proviso that your experience may be slightly different in your local market.

mynnna's first prediction was: "Expect a base price rise of 3-4% or more" on manufactured goods. His reasoning was that manufacturers need to cover the higher fees in Crius, which should have driven prices up slightly. That is the rational conclusion, but markets in New Eden are rarely rational. A quick survey of common Tech I items shows the ususal cacophony of price increases, decreases and fluctuations, instead of a general price rise since July 22nd.

However, mynnna also predicted "chaos" for prices of Tech II manufactured items, and this has proven to be more correct. The dominant effect of increased levels of invention has resulted in higher production of advanced tech items, putting downward pressure on most prices in the market. These examples illustrate the broad declining trend for Tech II items:

Notably, there are some exceptions to the prevailing trend, such as Tech II sentry drones and afterburners, though with more price fluctuations, as illustrated here:

I would love to see some summary statistics from CCP Games on overall market pricing trends since Crius. (Alas, we need our economist, CCP Dr. EyjoG, back!) But in general, what I have personally experienced so far seems to be the result of higher participation and activity by an increased number of producers, resulting in lower prices for most Tech II items.

The lesson for inventors and manufacturers is nothing new in EVE Online: research the markets carefully before deciding what items to invent and produce. This basic advice has become even more important in the post-Crius environment, given the higher market competition and the significant fluctuations in prices on many items.

Minerals Since Crius

mynnna also predicted that mineral prices would be "Probably down, mostly." However, he was far less certain about the expected impact of Crius on minerals. Indeed, so far, prices on minerals have trended in unpredictable ways since the Crius expansion release.

Here are the minerals that have trended upwards:

Meanwhile, other minerals have trended downwards, or remained low post-Crius:

And finally, two minerals seem to be fluctuating as the chaos of the emerging post-Crius market continues, especially Morphite, which is now required for most Tech II item manufacturing:

I honestly do not know what to make of these trends. You would think that with the addition of Mexallon, Pyerite and Nocxium to Arkonor, Bistot and Crokite, respectively, there would be more supply of each, and therefore, a consistent decline in price for all, but that has not turned out to be the result, so far. Suffice it to say that the mineral prices in the post-Crius era illustrate the still ongoing disruption in the market, and any consistent patterns of relative price levels have yet to emerge.

The New Normal

Though my casual high-sec industry experiment is ongoing, I've had enough experience in the post-Crius world to come to some initial conclusions.

  1. Profits are still to be made in industry, including in high-sec - though generally not at pre-Crius levels. The key to success in industry has expanded from simply maximizing production amounts to managing and minimizing production costs as well. In the pre-Crius world, gross profit margins on nearly all Tech II items were generally high (except for some ships and selected low-turnover items), and so, the key to success was to simply produce as much as possible. When your margins are big, you don't have to worry too much about expenses. In the post-Crius world, that is no longer the case. Now producers need to consider where they are based, the costs of their raw materials, the application of teams, and the effectiveness of their chosen production facilities - all to keep costs at low enough levels to realize a profit in the market. By paying attention to these factors, my cash flow has continued to be positive. In fact, since the release of the Crius expansion, my relatively low-effort high-sec industry experiment has produced over 3 billion ISK in cash. However, this does not take into account my previous investments in fixed costs, such as my POS and related expenses. Still, I remain optimistic about the long-term profitability of my experiment, so far.
  2. Higher competition in markets is the new normal. More than any other factor, the increased level of participation in industrial activities is driving prices and profit margins in the post-Crius world. I don't think even CCP or many of the industry experts in the game adequately foresaw the impact of the large number of players who have jumped into industry, and based on the trends so far, the higher level of competition in the market shows no sign of abating.
  3. Sell in optimal markets, patiently. In the pre-Crius world, I usually produced my Tech II modules and shipped them to Jita for a quick sale. With the generally lower price levels in the post-Crius world, I have to be more discerning about where I sell my manufactured items in order to realize good returns. I've established trading alts in multiple local markets, and use them to determine where to ship items to take advantage of the best prices. It takes longer to use sell orders in these smaller markets, to be sure, but the margins come out better - it simply requires more attention, persistence and patience. One of CCP Games' objectives was to spread the value of industrial activity across more systems in New Eden - in this regard, the Crius changes have been successful.

Bracing for the New Invention

As I reported in my previous post, I'm excited about the upcoming changes to invention, though I suspect that it may actually work against me in the market. The proposed changes simplify the invention process, making it more accessible to players. I expect that this will encourage even more participation, which will further increase supply and put even more pressure on Tech II margins.

Therefore, I remain reluctant to proclaim my experiment in high-sec industry a success. The storm that started with Crius is not yet over, and there is at least one more wave of change to endure before I can come to any final conclusions about the viability of manufacturing in high-sec space as a profitable, solo enterprise.

The emerging new normal for industrialists in EVE Online is not yet fully defined, though it is beginning to take shape - and so far, I am intrigued, though still a little fearful, by what I see.

Fly safe! o7

Odds and Ends

The last month has been relatively quiet for me in EVE Online. In game, I've been focusing on setting up and operating a solo manufacturing operation in high sec, using the new Crius mechanics - more on this below. Out of game, I've been traveling like a madman, which has impacted the amount of time that I get to hang out in New Eden.

To catch up, I thought I'd make a few brief comments about various odds and ends in EVE Online that I've experienced over the last month.

On Accessing Tranquility in China

I traveled recently for a couple weeks in China, on business. Before leaving home, I set all my characters to long training queues, as I wasn't certain if I would be able to access the Tranquility server while visiting several Chinese cities.

I had no problems connecting with the Tranquility server when I was in Hong Kong.

I had no problems connecting with the Tranquility server when I was in Hong Kong.

To comply with Chinese regulations, CCP Games licenses a separate server for EVE Online players in China, called Serenity, operated by the publisher Tiancity, while the rest of the world uses the main server, called Tranquility.

Several players told me I would still be able to access the Tranquility server when in China. Indeed, I was able to connect to Tranquility while in Hong Kong. But I had no such luck in Macau or Beijing. I'm not certain if that was a function of the quality of my hotels' Internet connections, or if I was bumping my head against the great Chinese government firewall. I didn't press the issue, as I doubt that Chinese authorities would have appreciated any attempt to hack through their firewall, just to keep my Tech II invention and manufacturing lines rolling in EVE Online.

On "Fixing" Null Sec

After the major revamp to manufacturing mechanics in Crius, the next obvious target for re-engineering appears to be null sec sovereignty mechanics. The current sovereignty mechanics have been mostly untouched since their introduction in the Dominion expansion in 2009. Most players who reside in 0.0 agree that with the political dominance of huge coalitions, null sec space has become much less interesting, and therefore, is now in need of a major overhaul.

I go to null security space only on rare occasions (evading bubbles on private courier jobs in a blockade runner), so I'm unqualified to speak about sovereignty mechanics with any degree of first-hand experience. However, I find the community commentaries and analyses about ideas for improving gameplay in null sec to be extremely interesting.

Some players have focused on changing "power projection" as a principal way to improve null sec play. Their argument is that it's too easy for big fleets to traverse across huge distances in New Eden, making it very difficult for smaller alliances to defend their turf. The result is the current status quo of enormous coalitions, leading to general stagnation punctuated by rare but huge mega-fleet fights like B-R5RB - which are noteworthy but also suffer greatly under maximum time dilation ("TiDi"), assuming the server doesn't crash completely.

I think The Mittani did a convincing job of dismantling that argument. In fact, after reading his recent "Traffic Control" columns on TheMittani.com, I'm pleasantly surprised to find myself nodding and agreeing with nearly everything he has said about improving null sec mechanics. His fellow Goon and CSM member, mynnna, also published an intriguing post on ideas for occupancy based sov - definitely worth reading as well.

Regardless of where or how anyone plays EVE Online, no one denies that a dynamic, exciting null sec is better than a dull, boring 0.0 space, since it affects everyone who plays the game, even those who prefer to spend most of their time in empire space. More combat and player-generated content is good for the game, and the supposedly lawless regions in null sec space should be fertile ground for that kind of goodness. I will continue to monitor the ongoing discussions closely, and I encourage anyone playing EVE Online to do the same. Changes are coming, inevitably.

On Crius Industry

My experiment to operate a solo, casual manufacturing base in high sec space continues, and so far, I'm happy with the results. The Crius expansion's revamp to industry definitely made the user interface much, much easier to use. Now I can start invention jobs with only a couple of mouse clicks - a dramatic improvement over the carpal tunnel syndrome inducing click-fest of the old UI.

In general, I love the improved manufacturing interface, introduced in Crius, with only a few quibbles.

In general, I love the improved manufacturing interface, introduced in Crius, with only a few quibbles.

There are still a few quirks about the shiny new interface that bother me, but they are relatively minor. Sometimes the UI shows a blueprint available when I've already started a job with it, and then will give me an error message. The top graphical portion is far too large - so much so that I can see only two lines on the lower detail display on my laptop's smaller screen. It's pretty and useful, but I wish there was a compact version of it, to give me more lines of detail displayed below. But overall, I love the new UI.

I was concerned about the revised costs of invention and manufacturing, and whether it would still be possible to make a profit as a casual manufacturer in empire space. After a month, my experience is that significant income can still be made as a high sec manufacturer in EVE Online, albeit at slightly lower margins than before Crius. One does have to be much more aware of where to base operations. I found a nice, quiet system where my job costs are routinely low. I also won a few bids on some nominal-value teams, which help to trim some expenses a little. With two characters doing a total of 21 Tech II invention and manufacturing jobs concurrently, at least a couple cycles per day, my net profit margins appear be between 20 and 30 percent, on average, depending on the item sold. That means I do need to log in two or three times a day to keep the job queues running, but with the new easier UI, that doesn't take long. My cash flow is definitely going in the right direction, and I'm having fun, so I have to give a couple of thumbs up to Crius manufacturing, so far.

My experience may be unusual, however. I know a couple of players who put up manufacturing POSes in a highly populated system, and they are struggling. They expected to benefit from a regular inflow of cost-reducing teams to keep their expenses down, but they have been disappointed. They are now considering moving their operations to more remote systems. I'm sure CCP Games would say that this is working as intended.

I am continuing to monitor the actual amount of income that I am generating, and I will report on my cash flow results next month. But I like what I have seen thus far. If my experience is common, the dire predictions of some naysayers about the death of high sec manufacturing appear to have been greatly exaggerated.

On Hyperion

The Hyperion expansion came with relatively little fanfare, compared to Crius, but it has a couple important aspects that I have found very interesting.

First, I was very pleased to see the addition of the new Level 4 "burner missions". It took a while before I finally got one of these, and I jumped into it fairly unprepared. My foe was a Cruor who nossed my assault frigate to zero capacitor, despite fitting a cap booster module, and I quickly died. Burner missions are definitely much tougher than the standard Level 4 missions - and my eager enthusiasm to try one was definitely my undoing.

When I got my second burner mission, I was much more contemplative about what ship to fly and how to fit it. This led to a much longer but more satisfying result - a win, but a close one, with nearly all my armor gone.

I'm all for adding more engaging PvE content in EVE Online. I was excited about ghost sites in the Rubicon expansion, but they occur with such infrequency that I've only had the opportunity to try two of them, so far - much to my great disappointment. I'm pleased to see that the more challenging burner missions occur more regularly. They are definitely more difficult, but much more satisfying gameplay. In terms of ISK per hour, however, you are still going to do better passing on burner missions and just grinding out regular Level 4s.

I do dive into wormholes from time to time, and so I was interested in the changes to their mechanics introduced in Hyperion. So far, I haven't really seen much difference, though I only do Class 1 and 2 holes solo. The serious wormholers that I hang out with in chat are very unhappy about the change to distance from the wormhole entry varying by mass of ship - most hate it, as it makes it more difficult to "roll up" a hole and control access. But even they admit that the other changes introduced in Hyperion have been generally good improvements.

Despite a somewhat lower level of engagement with EVE Online over the last month, I've had a pretty good time in game, when I have been able to log in. Now that I've returned from my travels, and plan to be home for a while, I'm looking forward to cranking my manufacturing operations at full tilt, to see what kinds of earnings I can maximize. I've got a couple of other projects in the works, too - more on those next time.

Fly safe! o7


Behold, Crius

Tomorrow morning, Crius, perhaps the most significant expansion in EVE Online's history since 2009's Apocrypha, will be released. Crius' wide-sweeping overhaul to nearly every aspect of industry will change just about everything about how things are built in New Eden.

If successful, Crius will make industry more accessible to players, and provide a more surmountable learning curve, giving more people an incentive to become industrial entrepreneurs in the game. The user interface has been dramatically improved, and it provides more visual and accessible information about how different aspects of industry work, making it easier to learn and operate.

Crius introduces a new user interface for industry, which provides useful information in a more accessible style.

Tomorrow morning, as soon as my patch is installed, I will rush to install two small player-owned starbase (POS) towers in a high-sec system. Crius removes standings requirements to anchor POS towers, and opens up new moons in high-sec space that were heretofore unavailable to capsuleers for establishing their industrial operations. I anticipate that it will be quite a "land rush" as pioneering industrialists seek to lay their claim on these new systems. I only hope I can get to my intended moons first.

I'm very proud to report that my former corp, EVE University, has done an outstanding job in developing guides for anyone trying to learn the new industrial mechanics. One of my last acts before leaving the Director of Education post at E-UNI was to initiate a project to collate and publish a Crius industry update on the EVE University wiki. Our Teaching Manager at the time, Kivena, took command of this project. He and his team of dedicated teachers and content contributors have put together the definitive compendium about Crius industry methods and practices. I recommend it highly to anyone who wants an orientation to all things industrial in EVE Online.

I'm also delighted that Kivena has been appointed to succeed me as Director of Education at E-UNI. He'll do an excellent job, and will carry on the mission of helping EVE Online players to succeed and have more fun in the game.

Cautious Optimism

I'm excited about Crius, but I'm very curious about what impact it will have on the economy of New Eden. Will prices go up, or down? Will it be possible for industrialists to operate profitably in high-sec or low-sec, or will all of the profits veer into null-sec space? Can industry continue to be a profitable activity for solo players, or will it become the exclusive domain of large, dedicated industrial groups?

I suspect that no one knows the answers for sure yet - not even CCP Games. Certainly, the pendulum of profitability for industry will swing towards null-sec with Crius, but will it leave enough room for industrialists in other types of space to succeed as well? That is a critical question which I plan to explore over the next few months, as I attempt a deliberate experiment as a solo industrialist in high-sec. I will report on my experiences routinely in this blog

My initial estimates and broad calculations tell me that I should be able to make a decent profit making Tech II modules in high-sec after Crius debuts - but we shall see how it actually plays out.

There have been a few speculative blog posts about what will happen after Crius. Of the most interesting, mynnna's blog post makes some fairly specific predictions, and is worth a close read. As a member of CSM9, and one of the strongest contributors to the industrial changes, he almost certainly knows more about Crius than anyone else, I suspect. He is also a Goon and a null-sec resident - and as a result, will be one of the beneficiaries of Crius, so bear that in mind as you read his post. But to his credit, and to that of the entire CSM9 team, Crius' buff to null-sec industry is balanced somewhat by expected increases in shipping costs. I anticipate that Crius will not cause a wholesale move of all industrial profits into 0.0 space.

I could be wrong, however, and Crius may very well be a complete disaster for industry in Empire space, as some cynical pundits insist. But for now, on the eve of Crius' release, I am cautiously optimistic.

Happy Patch Day - I Hope

So, I go now to set up long skills to train in my characters' queues, just in case. And I'll reprocesses a bunch of loot I've had on hand for ages, since Crius will be less generous in that regard. And I'll get my industrial ships ready to deploy my new POS towers. Finally, I'll await downloading and installing the new patch with great anticipation, and hope for the best.

Happy Crius patch day, everyone.

Fly safe! o7