One Million Skillpoints

One million skill points, even mentioning the amount, a one with six zeros behind made my eyes roll once more when i wrote this sentence.

It is, to my knowledge, the biggest gift CCP ever offered to its playerbase and most likely a one off by the studio. To put it back into context, there were two types of “skill points gifts” CCP  does during event periods :

1. Cerebral boosters : such as the “men at arms” booster offered when you refer a friend. They allow to boost your attributes and increase your SP earned per hour. They would work like a drug, and as such, are affected by the Biology skill, which is why it is always advised to train biology V to make the best out of those.
2. Raw skill points : the amounts vary widely, but those rewards would range from 20000 to 100000 skill points.

This is why ONE MILLION skill points is a mind-boggling amount to me. A toon, reasonably optimized to learn a certain set of skills (ship flight as an example) could earn around 2500 SP per hour. Which means this one million gift sits at around 400 hours of “free” xp.

At the current pace Skill injectors go, sitting at almost one billion per injector(24/05/2019), this gift is at least worth 2 Billions isk. But in reality it is much more due to the regressive nature of skill injectors : your return on interest lowers with the amount of skill points you have.

                                                                       

For me, an injector would offer 300 000 skill points, one million is equal to 3.33 skill injectors, so almost 3.4 billions.

Now that I have explained how amazing I felt redeeming those precious skill points, the question is : where to spend those ?

With only two accounts, the task was relatively easy for me.

I trained accounting and broker relations to level five on my Jita seller.When we look at their description, their effects look unimpressive without context.

Let us talk about accounting first : how much does 10% reduction on a 2% taxes on sales mater anyway ? It’s 0,2%, it looks negligible.

It is everything but negligible when you check it with the long term in mind, especially as you scale up your industry. Per month, I have a gross income of almost 20 billion isk, a 0,2% reduction in taxes is equal to almost 40 million per month. 
If we take a pure mathematical approach, it would take me almost 100 months to get my “return on investment” and this very limited calculation does not take into account the potential inflation EVE is subject to. 

The same calculation comes into play when we observe Broker Relations : you flat out remove 0,1% from the value of the sell orders you place per level.

For the sake of argumentation I’ll say sell orders values are equal to the actual sale value (which is a very plausible estimate if you are in a isk war situation : prices have a very slim variation between the initial sell order and the actual sell price, as negligible as a hundred isks. When we are talking about multimillion transaction, it can be called negligible)

Here again, if we take my gross income of 20 billion isk : it shaves 20M of extra margin on our sale.

If I cumulate both : I end up with a pretty nifty 60M isks saved that will go in my pockets. It sure isn’t as flashy as saying “I’m training  precursor cruiser V or a carrier skill to V”. Alas, taking everying into account, small additions cumulate into nifty sums 

Furthermore, the road i have before me is long, getting a return on the initial 3.4B isk value will happen one day. In the end, it will slowly snowball and scale up as my industry plans scale up a level. As a bonus, it will profit me when i sell pretty much anything, if i want to dabble into market trading, the toon is ready, which is always an upside !

Talking about scaling up :  I invested the one million skill points received on my alt account in mass production and advanced small ships production on my alt account. This placed me 14 days ahead of my schedule when it comes to make it ready to produce tech 3 destroyers. A surprise, but a welcome one for sure.

It is time for me to consolidate assets and prepare isk in advance to buy everything for the day it becomes ready to produce those precious jackdaws and hecate. Doubling my production capacity will sure feel awesome. And it will make those skill points invested in my trader  pull their worth in isk in a shorter period of time.

Wandering thoughts :

One million skill points gifted on all accounts ought to shake some parts of the game and the market. Many will try new ships and the next weeks will most likely be interesting to watch from the market side. I have a special interest on triglavian market as their ships are the current hot stuff and new tech two ships with yet unseen capacities are to be released.

We sure play in interesting times.

Until next time,

Produce well

General Rules of Industry

Much like the rest of EVE has implicit rules ("Don't fly what you can't afford to lose"), EVE's industry has rules of its own

Here is a breakdown of the 10 rules I think any industrialist should follow during its career :

1. Don't undock a ship with a cargo you cannot afford to lose. This rule is quite similar to the "do not undock a ship you cannot afford to lose" If you move a precise type of high value cargo, use the proper ship for the job, otherwise you run the risk ok losing not only the hauling ship, but the assets you carry with you as well.
2. Check the market details in trade hubs and especially in Jita :  the announced value of the sale and the real value of the sale often differ. It's generally not much, a few millions, but a few millions multiplied by fifty or one hundred will quickly start to add up to hundreds of millions.
   Not because the tooltip of the industry window says "31million isk" that you should trust it blindly. Always doublecheck the value
3. Check the volume of sales : if an item shows a 30% margin : it is great, a very solid start indeed. but the next thing to check is the sale volume in the trade hub. Ask yourself the following set of questions :
1. Is there a high amount of the item for sale ? If yes, this is encouraging
2. How does the supply look in relation to demand? Do the following calculation : check the amount sold per day and divide it by the amount offered on the market; The higher that number is, the better your perspectives look for that market.
3. Check if there are "big players" on the market, orders having almost a day worth of sale can alert a prospective industrialist that someone is already mass producing the item. It can be good and bad. good, because it means the margin is definitively here. But this is also bad, because they will fight you for  market shares.
4. Always look at the market's Donchian curve : it represents the variation between the lowest sell order and the highest buy order.
   Mathematically speaking, a Donchian always exist because EVE has taxes on transactions, but it is important to observe its evolution over time.
1. A stable donchian means there will most likely always be a margin. Generally, the higher the base value of the item, the bigger the Donchian is in terms of isks (because taxes are multiplicative of our sale order : 1M * 3% is 30000 isks, 1B * 3% is already 30M isks. but relatively speaking, %ages are more interesting to observe)
2. If the current Donchian peak point is higher compared to the average be wary that it will most likely drop down again, do not get fooled by your apparent margin and take the potential drop into account.
3. Always expect a drop in price when estimating the margin even if the Donchian has not shown any dip by the past, it may never happen, but you never know. If the margin is close to zero, it may be better to avoid risking your isk in it.



A lot of back and forth in the last month in the Hecate Market, representative of points 4.2 and 4.3. Not sure how good the margin will be next week, but for now i'll enjoy what i have. Also note the bar chart representing sales volumes reaches as high as 250/day in the Forge region

5. The lower the SP necessary is to produce an item is, the lower the margin will generally be. Simply because more people can enter that field of production and that will generally lead to be a better optimisation by the masses and reduce your potential margin because of the high supply and competitiveness on the market.
6. But low SP requirement doesn't mean an absence of margin, a common item can yield very good and reliable margin even if it is easy to sell. Rigs are a prime example of such "easy" margins. The thing is, you need to spot the item, produce it, and be proactive on your market orders management, it is not rare to see someone put up to a hundred tech two rigs sell orders at times.
7. Never go full retard scale : always test the market before launching the mass production of the item. You may discover some hindrances not visible with tools such as :
1. Someone always undercuts you every 5 minutes, making an item you thought very easy to sell a pure nightmare to get rid off.
2. It always sells by pieces of one, which means it needs constant attention
3. Market is unstable (which should have been seen in step 4), which means your margin is unreliable over a reasonnable time frame
8. Prepare more isks than the what the  game tells you would need. In the previous blogpost, i offered the general guideline to ready to freeze an isk for every isk announced as necessary. This rule still follows
9. Producing intermediate products that you will use later on can yield results : when producing some items such as tech two or tech three ships or citadels, it is wise to produce your own parts of the item to greatly increase the margins. This concept is known under the vertical integration of production and solves the double margin issue.
   Eve industry (website linked) is a great website as it allows you to tick the "Build your own components"  Here is an imaged example  of the vertical integration benefits :

   

   A sharp rise of 130 million isks of margin, almost doubling the margin in our case

   
   
10. Time is Money : producing takes time, if you pay a fuel bill, remember to induce this cost on your production charts or your calculations will be wrong. and above everything, time is important on prices and this is why learning the market is important. You have no insurance that a price you expect to sell your products at a "T" time will maintain itself over the "T + production time" time.

With these points in mind, it is possible to make a solid market analysis and enjoy doing industry with relative insurance that a margin is waiting at the end of the tunnel to reward your efforts.

Industry assets

Industry is above everything a matter of making more isks with isks you already have (or have borrowed). Capitas are mandatory in EVE if you want to go anywhere and especially when it comes to production. So i figured breaking down what industrial assets are and then detail my own assets could form a good first post.

Assets can come in many forms, a necessary notion to get when we talk about assets is the liquidity of the asset to estimate its real value and the time you'll stick with it. 

An item is more or less solid or liquid in terms of "how quickly can I turn this into ISKs ?". Isks being the money used for most of our market purchases, it is safe to assume it is the liquidity, hence the following analogy. The easier it is to transform items into isks, the more liquid the asset is.

Of course, you can firesell most of your assets in Jita 4-4 using buy orders, but by doing so, you will lose a lot of value from your assets and this isn't what we are looking forward to do. Ideally, we want to sell at the best margin for ourselves. 

Simply said, how easy is it to sell ... ?

• Researched blueprints (originals) : the least liquid of all assets, a BPO is extremely hard to sell simply because the demand is extremely restrained and most of it will actually do their own research in optimized facilities for such duties.
• XL ships : freighters, capital ships, can be hard to sell if you do not have a direct demand for those. We can also add that ships such as Black Ops or Marauders also fit that bill considered their efty price tag. As an example, around 10 providence and Sin are sold per day. it is an extremely limited amount when you compare with, for an example, a Nemesis class Stealth Bomber that can sell up to 100 of units per day.
• Citadels and citadel equipement : the most emblematic image of such difficulty to sell are structure rigs, almost no sale happen for structure rigs due to the efty price tag and the fact the blueprint originals are only 100 M isks.  As such, selling those at a non sacrified price can prove to be quite the hassle in some cases
• Niche ships : by their name, it is easy to guess most of the XL class ships also fall in this category. By their name, it is easy to guess their demand is limited, but it is living, so here goes to that
• Large sized ships, off meta ships : they are not the pinacle of the meta, they are not the hot thing called into fleets (FC can i bring my drake ?) but they will sell if you provide attention to your sell orders. 
• Faction ships : are relatively easy to sell in Jita 4-4 or trade hubs. We are entering in the realm of liquid assets that turn easily into cash.
• Common ships, meta ships, meta items, rigs tier II and highly requested tier II : also easy to transform into isks, depending on your volumes, one quick upload of your orders every day will get you rid of all your stock in less than a week.
• Salvage, research material, tags, ammos : all have a solid demand all around new eden, can't go wrong putting a sell order with those
• Ores, PLEXs : the easiest thing to sell in EVE mostly due to their core nature to the game. Please note i added PLEX on this level, but one must take into consideration PLEX is also a speculative item. and as such, it's placement in this list could vary depending on your use of the PLEX.
• Isks themselves : the money that vanishes from your wallet faster than you can say "spodbrain" when you have a fit in mind and find your pod in jita or your favorite trade hub.

When estimating how much your industry costs to run, you need to then separate what will be tangible fixed assets. Those are the most solid of the items of the list, a citadel, a XL ship and other similar high cost blueprints are things you will stick in the long term.

They differ from the other production assets that are consummed by the production process (minerals, fuel) which generally have a much lower cost.

So, what does an industrialist needs to get started ?

Someone can start on the side very quickly with limited assets : 50M isks, a ship, a small blueprint or two and a dream. Checking around the tool EVE industry, you can quickly determine what you need in terms of isks to buy the base materials.

To that first announced cost, you must add the blueprint of course. You will have to reinburse it. Ease up your mind : see it as investment that will stick with you till it blows up. As such treat it carefully and move it around with care.
Researching a blueprint before starting to manufacture from it is a key element to the success of an industrial endeavour.

The only begginer solid asset would be blueprints

To that, you need a bit of extra isks to acquit yourself of the taxes : production taxes and sell order taxes.

When an activity expands, so will the amount of money invested into assets helping running the production. This is caused by a two fold effect :

1. The thrive for bigger volume, gross income, net income : that will push most industrialist and players in general to buy bigger, more specialised ships. But you'll also need more blueprints, more lines of production, faster lines of production. All of which have a cost.
2. The search for security : the more valuable your production become, the more paranoid you should become. This is EVE after all. Investing in better tanking module, a transport ship or even a really well tanked interdictor for blueprints are step one player might take.

For security and conveniency, one might want their own citadel to speed up production time, I will try to discuss about the advantages of owning your own structure in another post.

In the end, we return to the original conundrum, you need more isks to print more isks.

Where am I in all of that ?

I produce Tech 3 destroyers, this activity is highly lucrative and makes my enjoyment since i started  doing it a few months ago. This part of production is highly skill intensive with a skill floor of at least 4M sp which drives a lot of possible concurrents away.

I will dedicate an article to my own approach to their production later. You can also check the "useful links" page for directions toward the eve wiki articles related to production.

I have around 8 billions isks invested in production assets that can be broke down in the following manner :

• Providence class freighter : 900M
• Fully fitted and rigged raitaru + 2 months of fuel : 1500M 
• Prowler class transport ship  rigged for speed : 180M
• Mastodon class transport ship full tank : 500M
• Components blueprint library : 300M
• Reactions blueprint library : 300M
• Materials in production : 3000M
• Blueprints copies prepared for use (T3Ds) : 500M (cost to produce those blueprints)
• End product in sale : 1000M

Total : 8190M isks, A.K.A 8.19B isks

A few highlights from this list : 

1580M isks, also known as 19.3% of the assets are ship related

600M isks (7.3%) are blueprint orignals or reaction originals (entering in one of the worst liquid category)

3000M isks, (36.6%) of the capital are strictly related to the production part, all the rest is, as such, added costs or unrelated capitas frozen the production necessitates to work properly.

500M isks (6.1%) are related to blueprint copies, this high amount of mostly related to the fact we produced T3D which have a high cost per copy ratio.

Rule of the thumb 

For each isk in production, prepare another isk to freeze in assets. 

This ratio increases with the size of your production and other factors such as your risk adversity, but this element shall never be neglected.

I hope this first article was enjoyable and I wish you an industrious time