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EVE Online Economics E-mail
Monday, 25 September 2006
Redundancy wrote the second part of his economics blog, this time going further in the details of the EVE-Online Universe Gross National Profit. Check it out!

In General...

It's been a while since my last blog, and a lot of stuff has been going on - I've gone and broken all of our new content in our "Vista Extreme" development code branch in order to get us to the structure we originally designed in marker pen on our full length office windows. I've not had much time to do anything on Economics, which is essentially something I do on weekends (so much for having a life!)

Late last week, after my last checkin, I switched back to the Kali development branch so that I'm available to fix anything and do anything that's needed for that, which has thus far involved adding the effects support for Gas Harvesting and taking a quick look at the wrecks (with the primary concern about their effects on framerate). I'm filling in any dead time by going through all the starbase structures to try and reduce the graphical "lag" they cause. I may post more about that as I get further along and see how I do - I'm planning on spending this weekend on it to make sure it's ready, if it looks like what I'm doing has any significant benefit.

I checked in something to enable preloading in warp on the client in a very basic form some time ago, and I'm currently waiting on the core cell to improve some of our disk IO to make this feature work well (You might currently notice stuttering in warp on our internal Kali builds) - it becomes especially noticable with fragmented disks, so I recommend you defrag. We need to see how it affects performance on our test servers before we make any final desicions about it though.

There's been a forum post or two mentioning that you'd rather have better performance than new graphics, but it's never that simple... There's people who are far more focussed on server performance than the Graphics Cell, and they're constantly looking at these sorts of issues anyway. Secondly, I feel that we have gotten to a place with Trinity (the graphics engine) where we cannot improve performance without rewrites to the engine and reworking the content to take advantage of any changes we make, which is a significant amount of work, and will take place as we upgrade all of our content anyway. The "Vista" project is actually far more than that, and will probably affect all versions of our game clients - we're rebuilding almost everything to work better and faster, and it's the fact that this is a project for more than the immediate ("fix lag!") future that's allowing us to justify that sort of investment of time and resources.

Back to the Economics...

In the last blog on economics, I left you with a few thoughts about CPIs as measures of inflation, and the associated problems. I haven't given you any Producer Price Indices, because to be honest, they look pretty similar and are open to the same problems with changing baskets, with the inclusion of tech 2 components. There's one other indicator of inflation that I didn't mention - the GDP deflator.

GDP and the GDP deflator

GDP stands for "Gross Domestic Product", and is a measure of the value of the goods produced by a country. If you just go ahead and work this out, this is called the Nominal GDP, and it's not adjusted for changes in the price of the goods that make it up. However, if you pick a date and fix the price of all goods at that date, you can work out the GDP again using those fixed prices to look at actual changes in production, and this is called the Real GDP. By comparing the Nominal and the Real GDPs, you can work out the GDP Deflator (indexed to the year you fixed prices at).

So what's the advantage? using a GDP deflator, we can fix the prices on a date where all the goods exist (a recent one). Back when those products weren't being produced, they didn't contribute to the GDP, and it doesn't matter that we don't know what their price was. We also don't have to worry so much about shifts in spending from one product to another.

I just pulled a magic trick and pulled out the GDP deflator without showing you the Real or Nominal GDP values though... The reason for that is that I feel they need a bit more discussion, which is what the remainder of this blog is for. In order to practically work out the GDP, I've taken some short cuts and made some approximations.

The GDP is meant to show the value of goods that is created, and there's a few ways to measure it, but the most practical for us is to look at the total amount of money spent on final goods and services in the economy. In fact, I'm completely ignoring any service industries in Eve, and I'm assuming that trade isn't making a large difference (doing this may lead me to count the contribution of a good twice or more) because this allows me to take the easy route of simply adding up the total monthly trades of ships, modules and other item types that I consider to be final goods.

This means that anything I post here is admittedly a crude approximation, but trying to work out if any single purchase on the market in Eve is a final purchase would be almost totally impractical.

Important notes
  • The GDP is calculated using the total value of transactions on goods that could be considered useable by players (not NPC tradegoods etc). Broadly, these include: Ships, Modules, Ammo, Drones and Implants
  • I'm considering skills and structures to be imports because they're NPC created. Since they aren't really manufactured as part of the real player economy, I think this makes sense, and so they're not counted at all. Feel free to disagree with me.
  • I'm not counting any services, which incidentally means that I'm not counting NPC bounty payouts as being part of the GDP. These are probably analogous to government salaries, rather than state benefits, and should be included.
  • I work out GDP for a month, not by year, since Eve hasn't been around long enough to have useful trends on a yearly basis. This is going to mean that the figures are affected by the length of the month in days.
  • As I've noted, there are significant and known flaws in the methodology of producing these numbers, so they're just provided for your interest as-is.

So theres the GDP of Eve on a monthly basis, which has been rising sharply in a similar way to our subscriber numbers. Of course, it's an interesting question about what happens when we look at the increase in GDP per capita:

In the GDP per capita, we can see a fairly strong year-on-year growth, approximately doubling from one April to the next.

What does all of this mean in a more personal context though? Sure, it means that as a whole, the economy is "growing", but how does that affect people in their daily lives? usually, the GDP per capita is used as an indicator of the quality of life, but this isn't showing us if (perhaps) there's a disparity between different groups of people in Eve, and what does increased quality of life mean in the context of an MMOG?

I think I'll leave that for everyone else to debate for the moment. :)


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