Wednesday, August 26, 2015

CCP's War On Illicit RMT: About That Hazard Discount

On Monday, the price of a PLEX sold in Jita finally exceeded 1 billion ISK. Yesterday, having finally broken the barrier, PLEX jumped in price by 34.4 million ISK to 1,039,989,998.96 each. From my point of view, that lowered the price of 1 billion ISK in Jita down to $16.82 USD.

At Fanfest, I spoke of the hazard discount, the price range in which players preferred to purchase black market ISK. For most of the past 2-3 years, the hazard discount ran between $10-$12 dollars per billion ISK purchased. But with the run up in the price of PLEX this summer, that changed.

To determine the hazard discount, I use the actual prices of the transactions I'm able to track at Player Auctions, a large gold selling site that also hosts ISK sellers. In April, the hazard discount, at $11.08/billion ISK, was solidly in the $10-$12 range. But in July, the hazard discount dropped over 20% down to $8.82. A price that far short of the historical hazard discount meant a drastic drop in the amount of ISK purchased, right?

Wrong. The amount of ISK I tracked barely dropped at all. So what happened?

My current working theory is that in April, the price of ISK not only fell within the middle of the hazard discount, but also was 50% cheaper than ISK purchased in Jita. That 50% off is a powerful mental influence to get people to buy things. I believe that instead of looking for a $10/billion discount, black market ISK buyers will now look for 50% off. Quite frankly, ISK sellers can no longer afford to undercut the Jita price by $10/billion.

CCP's goal of making ISK selling not worth the bother is slowly getting closer. I can't help but wonder if we are about to see another drop-off in ISK sellers similar to what we witnessed in the final three months of 2013 and throughout 2014. If the hazard discount becomes based on a percentage rather than a flat rate, that will delay the decline, but at what point do black market ISK buyers decide they cannot save enough money to justify the risk of losing training time, if not their entire accounts?

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