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The EVEconomy, An Update

Keith Cross Posted:
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EVE Online - The EVEconomy, An Update

News Manager Keith Cross had a recent discussion with CCP's resident economist, Dr. Eyjólfur Guðmundsson about the recent Quarterly Economic Report and what it means to players.

This year’s GDC coincided with the release of the EVE Online’s Second Quarterly Economic Newsletter (QEN) and EVE’s own resident economist Dr. Eyjólfur Guðmundsson was on hand at the show to help guide me through it. The current newsletter takes a more in-depth look at EVE’s population, examines various price indices, looks at inflation/deflation, shows some of the more interesting market snapshots, and defines the GUP, the virtual equivalent of real world GDPs.

One of the goals in Dr. Eyjó’s research is to determine the population distribution across the EVE universe. The first QEN took a snapshot of the locations of every character in EVE. The snapshot showed that, at the time, 78% of characters were in high security space, 13% were in low security space, and 9% were in 0.0 space. But a snapshot is just a snapshot, and only tells what is going on in that exact instant. The second QEN takes a deeper look at EVE’s demographics, this time monitoring movement between systems. The results showed that out of 460,000 characters, 250,000 or roughly half of those characters made at least one jump to another system. Of those 250,000 jumpers, 50% never left high sec space, thus conclusively proving that 50% of EVE players are wussies.

I kid of course. The current round of research shows that in the final weeks of Q4, 49% of pilots never left high sec space, while 32% traveled in high sec and low sec, and 19% visited all three types of solar systems. So to revise my previous statement, it turns out that 81% of EVE players are wussies. Or, for those that like to interpret statistics correctly, these numbers really indicate what types of economic activities players are taking part in, or the nature of the account. For example, Dr. Eyjó believes that the fact that almost half of the characters didn’t jump to a different system indicates that most of those characters are likely to be alternate characters or characters that weren’t accessed during that timeframe. Of the characters that jumped to other systems, roughly half never left high sec, showing that pilots in high security space tend to be more localized and make less jumps. One reason given for this in the QEN is that characters in high sec are taking part in more localized activities, focusing on regular tasks like running agent missions from a regular location. The fact that 0.0 pilots make more jumps than high sec pilots could also be influenced by the fact that 0.0 is fairly vast and by the nature of the remoteness of the areas these pilots visit, they need to make more jumps to get where they’re going.

With all of these pod pilots jumping from here to there, (or not jumping form here to there as discussed above) and driving EVE’s economy, one has to ask, how’s the economy doing? Bumpy patches tend to occur whenever a new expansion comes out. Just before Trinity launched players had a tendency to stock up on resources, particularly those that would be useful in constructing the new ships that were about to become available. This led to changes in the prices of these goods, and in the rate of production of new ships. After Trinity, the economy was also shaken up by an influx of new players, with almost 30,000 new players swelling the ranks of EVE subscribers up to 220,000. Dr. Eyjó said that the economy has now found equilibrium.

When I last heard him speak on the subject at Fanfest, many people were concerned about inflation and Dr. Eyjó enlightened us by informing us that the opposite was actually occurring. In the current QEN, he informs us that the economy has moved from a period of deflation to one of inflation, but he quickly reassures us by saying that inflation is not necessarily a bad thing and he described the general state of EVE’s economy as robust, finding a balance between money supply, goods, and production.

Another part of the research which Dr. Eyjó is conducting along with the University of Helsinki, is the search for a system that describes the economic activities such as growth, production, consumption, and investment in a virtual world economy in a relatively easily digestible form. They used the methods of the statistical division of the United Nations as a starting point and from there they attempted to describe the total value of goods and services produced in EVE over a particular time period. In terms of real world economics we call this the gross domestic product or GDP. For virtual worlds they’ve coined the term GUP, or gross user product. Armed with measurements of the GUP, Dr. Eyjó and his associates can more readily test other real world economic principles and how they function in an online space such as EVE. By measuring the GUP, they hope to show that the products in EVE’s virtual space have a real value.

Of course Dr. Eyjó is around form more than just spewing statistics and deriving formulas. As a professor it's also his job to ask questions and provoke thought. At the opening of the interview, he told me that the QENs were causing debates and that not everyone always agrees with his interpretation. But that's good. He's not trying to convince people of his opinion, he's giving them data and analysis so they have the tools to form their own opinions. What he said about measuring the gross user product and using it to show that whether there's real world money involved or not, the products in a virtual world can have value got us on an interesting tangent. If you live in a modern industrial society, you live in a society of consumption. In a modern consumption society one of the challenges we face is the dwindling of resources and the environmental cost of our behavior, and finding some form of balance and sustainability is in order. Humans have a need for consumption on various levels, and Dr. Eyjó suggested that it will be interesting to see if the consumption of virtual goods will result in decreased consumption of real world goods at some point in the near future. Maybe it will, maybe it won't, but it will definitely be interesting to see where the research goes as it gains more attention from an international audience.


Keith Cross