CCP's War On Illicit RMT: The Winter Status Update And The Hazard Discount

Last week CCP published its "Winter Status Update" which resulted in a lot of discussion. I was asked by a few people about a claim made in the conclusion of the dev blog.

The foundations of the EVE ecosystem are strong. PLEX prices have stabilized, stockpiles are healthy, great strides have been made in the war against botting (as evidenced by the skyrocketing RMT ISK price), and there are more ways to earn a living. The foundation allows us to build with more confidence and add more sand to the sandbox. What players can expect from now on is an increase in ship production, capitals out in space, new exciting strategic goals for small, medium, and large fleets – and more.

Was the price of ISK on the secondary markets (aka black or grey markets) really skyrocketing? Not at the time of the publication of the dev blog. I blame the delay in the publication of the dev blog, as the price on the black market did rise in late October and early November. Based on the buyer reviews on the RMT site Player Auctions, the 7-day moving average price of 1 billion ISK sold rose from $6.44/billion on 12 October to $8.66/billion on 12 November. I think a 34.5% increase in price over the course of a month could qualify as a skyrocketing price. However, by the time CCP released the dev blog on 14 December, the price had declined back down to $7.18/billion ISK. 

One of the problems with just looking at the sale price of illicitly sold ISK is the wide variation of prices. Over the course of 2021, the average price of ISK sold on Player Auctions varied by $2.39/billion with no discernable trend throughout the year.

A better metric to determine whether cost is affecting the sale of illicit ISK is the hazard discount. The hazard discount is the amount of a price reduction ISK sellers must offer buyers relative to the price of ISK purchased through CCP-approved means (aka the primary market) in order to entice those buyers into risking CCP banning all of their accounts.

During the period of time I believe the dev blog referred to as having skyrocketing secondary market, the price for ISK in The Forge also declined. The 7-day moving average of the value of ISK sold in Jita 4-4 and the TTT Keepstar also declined by 5%, from $13.06/billion ISK on 12 October, to $12.40/billion ISK on 12 November. But by the publication date of the dev blog, the value of ISK sold in The Forge rose back up to $13.12/billion ISK.

Overall, the hazard discount dropped 43.4% from 12 October to 12 November. People who were willing to risk CCP suspending or banning their accounts to save $33 by purchasing 5 billion ISK on the secondary market weren't so eager to do so when the savings dropped to under $19.

The hazard discount can also take into account the percentage of savings by buying ISK off the secondary markets. In our period of interest, the percentage the ISK price was under the value of ISK sold in markets in The Forge dropped from 50.6% on 12 October down to 30.2% on 12 November. The result was a big drop in ISK sales on PA. Sales had recovered in early December but were slumping again on 14 December with the hazard discount percentage at 45.3%

Now, I didn't address the "we're doing good against botting because the price of RMT ISK went up" argument. Does that mean CCP is doing bad because the price of ISK on the grey and black markets went back down? A pretty silly argument, in my opinion. More important is whether sales are going down. If the review data I collect from the Player Auctions website is any indication, the answer is yes.