I understand the need for such a system, but if it currently functions on a straight 'number of games played' = less sp I consider that a severe disadvantage to the players.

By that system I should only play games that I know I'm going to win and perform well in, and only bother to play a certain number of times per day. If I have a streak of losses or repeatedly come up against enemies that outclass me and my performance suffers in my first 5 or 6 matches of the day, but then perform wonderfully and win another 10 matches afterwards I'd have already lost the bulk of my SP for the day by not earning well in those first losses and being penalized with lower rewards in the matches I performed well in.

I would prefer instead a daily cap on SP rewards, say 250,000 SP per day before you start seeing a reduction in SP rewards. The reduction could happen slowly after the 250k mark, capping out around 500k SP per day before you're SP rewards are negligible after a match.

The system would need to only affect SP, not isk, otherwise you'd actually be penalized for playing with expensive gear as your day went on and you started to lose money every match.

diminishing returns affects you after your first match and compounds after each following match until you bottom out around 10 matches later. I like the idea of a game time based diminished return. After x amount of in game hours you bottom out and gain the bonus back after the same amount of real hours have passed not playing. This way the dr stays in place, as it should, and you don't have to worry for the server reset to play again. Currently I get hit by dr twice a day. I play at night from 9-12, then the next afternoon from 12-2. During that 12-2 period, I start with the same dr from the night before.

That doesn't even make sense. Why do you like the DR? All it's doing is limiting your playtime into separate chunks.