Thursday, April 17, 2014

CCP's War On Illicit RMT: Reviewing PLEX

I regularly listen to BigCountry's talk show on Wednesday mornings (Tuesday nights in the USTZ) and have listened to the complaints about the rise in the cost of PLEX.  The conversation is amusing, but I haven't felt compelled to write about the subject until EVE News 24 published a piece by Dirk MacGirk, a regular on BigCountry's show.  A very interesting read, but he completely ignored the primary purpose of PLEX: fighting illicit ISK sellers.

PLEX, the 30 Days Pilot's License Extension, is an in game item that players can turn in for 30 days of game time.  Since the introduction of PLEX in November 2008 to formalize the game time code for ISK trading that began on the official forums back in 2006, CCP have allowed players to use PLEX to fund other things like Fanfest tickets, character transfers between accounts, and the training of multiple characters on an account.  In a dev blog back in August 2009, CCP Grimmi made the following point about PLEX:
"One of the greatest thing about PLEXes is that they offer a way to stamp out unauthorized RMT elements trying to infiltrate the EVE community and hacking players accounts.  Buying ISK from unauthorized ISK sellers has serious consequences, as many players have discovered recently when they've had the ISK they bought removed as it had come from hacked accounts. It hurts, but not as much as having your account(s) hacked and cleaned out of ISK and assets, I assure you.

"The way of the PLEX benefits everyone involved. The very serious effects of the ISK seller rabble on EVE are limited. Your money is channeled into making EVE more awesome rather than ruining it. Players can use their ISK to play the game and save up their hard-earned RL moolah to buy that display card of OMGness they always wanted instead, for example.

"In short, everybody wins. Everybody, except the account hacking, credit card stealing and macroing ISK sellers, that is.  PLEX is a part of a two pronged attack in order to curb RMT in EVE.  The second part involves actions such as account banning, item confiscation and ISK reversals.  More on that next week when we will report to you on operation 'Unholy rage'."

CCP's battle against the ISK sellers relies on Team Security and InfoSec cutting into the supply of ISK available for sale.  Team Security does this by tracking down botters and the ISK sellers themselves while InfoSec safeguards players' accounts from hackers and phishing attempts.  These efforts produce gales of laughter from players when the tears of botters somehow make it from botting forums to the general public.  But the purpose of the effort is serious.  Decreasing the supply of available ISK drives up the price of ISK on the secondary ISK markets.

The website MMOBUX, which keeps track of gold selling sites, including collecting reviews, published an article in the summer of 2012 examining the price of EVE ISK from 2007-2011.  The article was of interest because it examined the price of ISK before the creation of a permanent anti-RMT team (Team Security) that began a full-time war on botters in February 2012.

The EBANK Heist "bannings" is what CCP called Unholy Rage
One of the charts showed the effects of the massive anti-RMT operation known as Unholy Rage.  The price of 1 billion ISK rose from $23.35 to over $67 per billion ISK.  But with the price of PLEX around 250 million ISK at the time, the price converted to U.S. dollars on the in-game market was approximately $70 USD per billion ISK.  The ISK sellers could charge that much because the ceiling created by the price of PLEX was so high.

One other item of note from the article.  According to the author, during this period the price of ISK was decreasing naturally at about a 14% rate per year.  I should note that I used to follow the median price of ISK listed by MMOBUX until I created my own index of sites.  According to my notes, the median price of 1 billion ISK on 28 October 2012 was $22 USD.  Yesterday, the median price for the 18 ISK sellers listed on MMOBUX was $23.92, a rise of 8.7% over the past 18 months.  From that, I would say that Team Security is having an effect on the supply of ISK available on the illicit ISK sites.

But as we saw with Unholy Rage, CCP also needs to establish a ceiling low enough that the ISK sellers can't make money.  If the business takes too much effort for too little profit, the ISK sellers will move on to greener pastures.  To lower the ceiling, CCP needed to increase the ISK cost of a PLEX.  The higher the ISK cost, the lower the real money cost.  The table to the left shows the various ISK to USD conversions.

CCP can lower the ceiling by giving players reasons to purchase and spend all of the excess ISK on the market.  How?  By doing everything Dirk said was bad to do in his EN24 article.   Character transfers, Fanfest tickets, multiple character training, custom ship skins.  That demand that Dirk railed against is the demand that is affecting the ISK sellers by driving down the prices they can charge for ISK.

As an example, compare the price of ISK in Jita 4-4 yesterday (16 April) with the median price offered by the sites listed on MMOBUX.  The average price of a PLEX was 719 million ISK.  That converts to $24.33 USD per billion ISK.  Only 41 cents more than the median price of $23.92/billion on MMOBUX.  More importantly, that means that half of the 18 ISK sellers are charging more than a player would pay by going through CCP (or purchasing EVE Time Codes from an authorized reseller).  The ceiling is already set low, and any major disruption in the supply of ISK could result in a site not selling any ISK for a few weeks.  Some sites have experienced this already and stopped selling ISK.

But CCP doesn't just have to worry about the big gold selling sites that deal with multiple games.  They also need to worry about the larger sellers who hang around various forums and sites like Player Auctions.  Is the rise in the ISK price of PLEX having an effect on them?  I think so.

The chart above contains information of what players actually paid for ISK, not the price that ISK sellers were offering, for the first quarter of 2014.  After the battle of HED-GP the amount of cheap ISK for sale on Player Auctions vanished.  Sales dropped for about three weeks until sellers with cheaper ISK showed back up.  For those wondering, that period included the battle of B-R5RB and its aftermath.  If players were RMTing to replace losses in the most costly battle in video game history, they weren't doing so at Player Auctions.

If CCP can increase the demand for PLEX even higher, then pressure will build on ISK sellers to drop their prices further.  If CCP can maintain the pressure long enough, more ISK sellers will give EVE up as a lost cause and hit the new games like Elder Scrolls Online and Wildstar.  If enough sellers leave the market, then the botters and hackers that supply the illicit RMT sellers will follow.  Not all of them, as some dead-enders will always stick around, but enough so that EVE becomes a better place to play.


  1. I'm afraid not. I think RMT covers only a few % of botting. I believe most botters are doing it for their own ISK needs. Not via botfarms but by running an alt or two while asleep.

    1. I believe that this article was pointing out to the RMT aspects and PLEX. Bottling may be intertwined buy is not strictly restricted to RMT as you note.

  2. Great article Nosy!

    Gevlon is right though that botters will never fully go away. There is also the issue of "non ISK" RMT - for instance renting space for cash instead of isk :/

  3. Non-ISK RMT will never go away, and nothing that CCP does will change that. It is a criminal activity (not just against the TOS).

    Gevlon is also correct, in that the focus of botting has become more focused on providing income for players to afford ISK, both from the real increase in ISK cost per plex and from the squeeze it has placed on the concept of selling ISK for cash.

    Of course, there is the other problem:

    If the price of PLEX is increasing, then that means that the supply is decreasing, relative to the amount of ISK. If players stop buying PLEX with cash, then the price of PLEX in game will skyrocket. If players who buy PLEX with ISK stop logging in, then the demand for PLEX will plummet.

    In my view, any radical change in the price of PLEX is problematic. Myself, I would prefer to see a steady price for PLEX, but that would require CCP to "set' a price for PLEX. To maintain this price would involve CCP artificially controlling the PLEX market via PLEX injection or removal.

    I believe that CCP does do some PLEX manipulation, but I believe they are focused on the rate of change of price, as opposed to the absolute ISK price of PLEX.

    1. As far as I'm aware CCP have only intervened in the PLEX market on a very small number of occasions, and only to prevent short-term wild swings.

      Despite what many people think - CCP can't afford to intervene in the PLEX market in a large way as there are real-life accounting side-effects. Every PLEX that exists is an out-of-game voucher to provide a month of game-time time when redeemed. Obviously these equate to real income and have a real effect on CCPs balance sheet.

      At the end of the day, the PLEX market is a true free market (at least to a large degree) - as players are getting richer in-game, it's only natural that the value of PLEX is going to increase to match that. A couple of years ago, 500m for a PLEX was very tempting to me. Now 700m ISK for a PLEX isn't, but 1bn ISK might be.

    2. From what I've seen looking at PLEX sales in The Forge, the volume seems pretty consistent, or maybe trending slightly downward, over the past year. On the other hand, the margin between buy and sell orders in Jita seems to be pretty static as an absolute number, so the decrease might be due to PLEX flippers getting out of the market as their margin goes down, so let's assume it's flat.

      This suggests to me that supply is constrained by a limited number of people who are willing to spend money to sell PLEX into the market, while demand has been increasing either because players are aging into greater income sources or uses have been driving up demand. Personally, I think the primary use of PLEX (paying subs) to determine the long-run demand of it, so I expect that it will eventually converge on some perceived marginal product of one character in the time that it resubs for. It might reach as high as the marginal product of one account, but I'm expecting that getting past a single cash cow per account will start significantly reducing demand. Given that I know I can get ~1B ISK per month out of a T1 manufacturing character with daily builds selling to Jita, and that it requires some effort, even though it's probably not more than an hour a day, I'd guess that prices might go up another 30-40%, probably after another "new usage" shock (because prices seem to actually be pretty sticky on PLEX) but won't quite reach 1B ISK/PLEX. Getting higher than that is going to require serious cleverness and a serious investment of time or resources; 3 accounts of that sort of manufacturing can not only easily saturate any market in EVE with a couple items, but it also will likely go through several billion ISK worth of materials every day.

  4. The gold sellers are already hitting TESO hard, I assure you. The spamming and the number of bots camping bosses is amazing. People are hacking the game so that treasure chests (rewards for careful exploration) spawn in cities while invisible "players" teleport from resource to resource, harvesting things right out from under me more than once. It's amazing, and infuriating.

    Zenimax has its hands full.

  5. CCP has a vested interest in keeping the ISK price of PLEX high... But not *too high.

    The higher the ISK price, the more players will buy PLEX with real money to resell for ISK.

    Adding more uses for PLEX (character transfers, multi account training, skins, etc.) increases demand for PLEX.

    They just have to be careful not to let the ISK price rise so high demand from ISK buyers drops and kills CCP's golden goose. That's why they don't like sudden, big changes in the price.

    As for botters, the big botting operations running multiple bots are the ones that tend to be involved in RMT. The guy running 1 or 2 bots is usually doing it to generate ISK for his own use.

  6. It wasnt long ago where it was revealed that a high profile null-sec 'cartel' used multiple bot farms to generate a large amount of ISK .. what was implied was a laundering scheme whereby cartel leaders generated a real money income from such farms. En24 published the article as an expose into null-sec RMT. The author claimed to be the leader of such an effort who had left EvE for other pursuits.

    I know this is really tangential to the main point but I cite this story to illustrate the level of organization and the fact that mom&pop botters may be fairly sophisticated compared to what the above commentators reflect.

  7. Nice article Nosy. PLEX is much more than just a vehicle for game time or fanfest tickets. It really is kind of hard to discuss PLEX or Sovereignty changes or almost anything these days given all of the various sub-topics that are tied to them without running so long nobody will read it. But good job in bringing this angle into it. Perhaps a substantially higher PLEX price is good for Eve. Maybe not for some individual players, but good for the game itself

    1. I know what you mean. I have more to say about PLEX, but I cut it short. That's why it's nice to have my own blog. I can add another post whenever I want :)

    2. The more I think about this, I'm probably going to draft a new article that generally recants some of what I said. I stick by the inflation aspect of it being driven by demand CCP is creating by encouraging new uses. However, if you take the view that defeating ISK sellers, and all of the security issues that follow them, is the goal, then the uses of PLEX are just a means to an end. Further, the price of PLEX in ISK would need to be at or near a level that makes it unattractive to acquire ISK illegally.

      With that in mind, CCP really shouldn't care one bit about the ISK price so long as players continue to transfer their ISK to those players seeking to legally acquire ISK for real money. It does toss out the concept of a free market, because in order for CCP to stay ahead of the bad guys, they'll just work to artificially keep the price moving higher. But again, their goal isn't that you or I can PLEX our alts and train multiple characters. Those are just necessary by-products to create a market for the PLEX buyers.

      Anyway, still too many words. I'm very bad.

  8. I need around 3b/ month to fund my pvp. I buy plexes for $ and I sell for isk. When plex was for 500m, I seeded market with 6 plex/month. Now plex is over 700m and I sell 4 plex/month. Plex supply provided by me decreased, despite price raised. How does it fit into your all theory?

    1. it pretty much fits with my supply-side theory. That players buy only as many PLEX as they need to obtain the ISK required. Thus as the price goes up, they buy fewer PLEX. That of course assumes broad-based inflation in game remains modest. Which by all account it has. Of course a higher PLEX price MIGHT attract new purchases of PLEX to sell for ISK as players who don't usually buy PLEX find it attractive, but I don't have any evidence that is happening. It would be great to get some data from CCP showing if PLEX sales change as the price goes up. But they just seem so tight-lipped about it all.

    2. The obvious answer is that it now costs 1/3 less dollars to play the game the way that you do, so it is very probable that more people are doing it.

      EG: YOU are only seeding 4 PLEX per month; the two other guys that have deceided that they're going to do the same now are seeding another 6 between them.