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Winsaucerer
The Southern Legion
RISE of LEGION
64
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Posted - 2013.05.08 01:42:00 -
[1] - Quote
So, I made a post the other day about the AUR refund. To put things out in the open, I would be one of those who receives millions of AUR if there's a refund. With that caveat admitting my bias out of the way, I still think there is a genuine case for CCP to do the refund.
The original plan was to refund most AUR items at their current AUR values. However, this plan was cancelled at the last moment, because some of us would receive millions of AUR. The stated concern, by CCP Eterne, was that "we realized this would give a hugely unfair advantage to these people". This as a reason, however, does not fly for three reasons:
1. It seems to entail that Dust 514 is "pay to win"
2. This "huge advantage" is available to anyone with deep outside-eve pockets (should we implement an AUR cap?)
3. This "huge advantage" is available to any rich EVE players, once the economies are merged
So it's not clear to me that it is a huge advantage, and if it is, then it's a problem for other reasons. Furthermore, CCP should keep in mind what people will be likely to spend their AUR on. I'm sure they have data on AUR spending habits, and I imagine a great deal of this AUR will go directly into boosters. In terms of advantage, this cannot be described as "huge". Perhaps on its own this would give a slight reason to cancel a refund, but it does not seem to me to be a particularly strong reason at all. Weighed against the considerations in favour of a refund, I do not think it is strong enough.
Now, there is one important reason why CCP may wish to not reimburse the AUR -- and that is, that it may affect their revenue. I think that is a legitimate concern, as that is what fuels Dust 514 development. However, I actually think it may possibly be *worse* for CCP's revenue to not reimburse the AUR now. Worse, that is, once these BPO's are able to be sold on the ISK market. It sounds like there are a lot of these BPO's spread among the closed beta players. Most likely thousands of each BPO, or of each of the most expensive ones. Once the market opens up, players will sell these BPO's, likely at significantly less than their converted ISK value, due to the large number available and likely demand. Players will buy these BPO's with ISK instead of AUR, and CCP loses revenue from those players who would have purchased those BPO's with AUR instead. If CCP reimburses the AUR instead, then a number of people such as myself will use that AUR on boosters I wouldn't have purchased anyway, or on other items I wouldn't have purchased anyway (I don't have outside-eve deep pockets). And some of that AUR will sit dormant, unspent. That is, CCP will lose some revenue, but not the full value of the AUR in revenue. On the other hand, without a refund, they will lose some revenue from ISK sold BPO's. Of course, not everyone who purchases a BPO with ISK would have bought that with AUR instead, but the existence of these BPO's will represent a loss of revenue.
Of course, there's lots of assumptions here. I, however, do not think that CCP's revenue will be obviously *worse* if they reimburse the AUR. I do think it could possibly be higher. At the very least, I think it is worth considering the possibility that a reimbursement might be their best option (or at least neutral) from an economic perspective.
And finally, there's the innocent victims of this change -- those people who didn't take advantage of the early beta lower prices, who have bought suits or militia bpo's on the basis of particular fits, and now want to skill into something different with the new Uprising skills. Or those who's suits are no longer available without investing significant SP's. These people are a strong case in favour of AUR refund, particularly since some appear to be claiming to not purchase any more AUR, or at least not for the moment. Weighed against the not-so-huge advantage, and the economic considerations, I think this last point tells strongly in favour of a refund. |
Winsaucerer
The Southern Legion
RISE of LEGION
65
|
Posted - 2013.05.08 01:48:00 -
[2] - Quote
Mobius Wyvern wrote:
Perfectly fair, considering all the factors involved.
You are referring to a different offer, which was not the one that was originally intended (and is no longer mentioned in the original dev blog, but I'm quite sure was there at first -- see CCP Eterne's post for evidence of a change in plans). This offer you mention exists, but it's not the one I'm talking about.
And that is an offer only for "players that purchased the Mercenary Pack or Aurum Packs before January 22nd an optional full character reset with Mercenary Pack or Aurum reimbursement". How does that help players who made purchases after Jan 22nd?
How is that fair to the player who purchased a logistics BPO, but now with Amarr available wants to specialise in Amarr?
Or in something other than logistics?
Those with ISK are able to change their specialisation without a character wipe. I think you and I have a different sense of the word 'fair'. |
Winsaucerer
The Southern Legion
RISE of LEGION
65
|
Posted - 2013.05.08 02:06:00 -
[3] - Quote
Phoenix Arakyd wrote:Why is it so hard to refund the AUR items at their original cost?
If by "original cost" you mean the 30 or so AUR I paid for each BPO, the reason is simple: I bought those items legitimately, and in normal transactions the seller doesn't get to say later, "look, we want to take back your house and bump the price up 10x, but don't worry, we'll give you back the price you originally paid, and you can buy it back at the 10x price...if you like!".
Those are my BPO's, so after any refund I'd better be able to repurchase them back without losing anything. |
Winsaucerer
The Southern Legion
RISE of LEGION
66
|
Posted - 2013.05.08 02:52:00 -
[4] - Quote
Disturbingly Bored wrote:
Having several players with millions of AUR in their accounts also creates a long standing thorn that they have to account for whenever they decide to introduce a new way to spend AUR. It causes a detriment to future revenue streams if some new way to spend AUR is either tradable, or would be desirable to the people who have a mountain of AUR to spend.
This problem exists anyway, once the current BPO's are tradeable. It either hurts their revenue one day on these specific items (choice 2), or else on these and unspecified future items (choice 1). However, I have given reasons to suggest that the revenue loss may be less with a refund now.
Quote:Having several players with hundreds of BPOs in their accounts causes less of a problem, as it only deflates the ISK value of those BPOs once they open up a proper market. (You cannot directly trade for AUR on the EVE market, I'd bet good money you won't be able to on the DUST market.) There were only so many BPOs that were purchased cheaply, and there will not be any more in the future.
And deflated ISK value translates into loss of revenue. Those BPO's don't disappear -- players buy them, and for a deflated ISK price, thus cutting into CCP's revenue.
So I do not think your analysis clearly shows that there is a strong reason to avoid a refund. However, the innocent players hurt by this are a strong reason to give a refund.
There is no doubt that there are considerations on both sides. The question is, which is overall the best option? I've made what I think is a case that the better option is a refund. What you mention might be a consideration in favour of not refunding, but it's not clear to me right now that it's saying anything new or that it's a strong consideration against a refund. |
Winsaucerer
The Southern Legion
RISE of LEGION
67
|
Posted - 2013.05.08 03:17:00 -
[5] - Quote
Garrett Blacknova wrote:
There was no way for anyone, back when BPOs were 30 AUR each, to know that they would skyrocket in price like they have.
This is not quite true. CCP announced (days?) prior that the BPO's would go up to about 300 or so each from 30. At that stage I had thought I would not bother. Then, 30 minutes before the DT that gave the price rises, they posted a new update that I was fortunate enough to see -- the prices were going up sometimes as high as 11,800 each. That gave a 30 minute opportunity based on the knowledge of an 11k price.
So there was a way to know in advance, but for the high prices we see now, only 30 minutes advance warning. |
Winsaucerer
The Southern Legion
RISE of LEGION
67
|
Posted - 2013.05.08 04:43:00 -
[6] - Quote
First Prophet wrote:DUST Fiend wrote:It is funny that their argument basically says "AUR gives too much of an advantage"  This. 
That's the thing that gets me :)
And just on an unrelated topic, there's plenty of things I love about Uprising. I'm hoping just to give feedback on one aspect I think was not done well. |
Winsaucerer
The Southern Legion
RISE of LEGION
68
|
Posted - 2013.05.08 09:18:00 -
[7] - Quote
Disturbingly Bored wrote:
Not quite so. The BPOs don't deflate the value of ISK as a whole, only for Militia BPOs.
The BPO's don't deflate the value of ISK at all. The value of ISK would be in terms of what, and how much, it can get you. Pumping more goods into the market, all other things equal, would increase the value of ISK. What gets decreased is the ISK value of these BPO's
Disturbingly Bored wrote:One affects a limited number of items, which cannot be bought for the cheap price again at any point in the future, and the other affects the cost of all AUR items across the board until all that spontaneously generated moolah is spent.
You say that one option affects a limited number of items, while the other affects all AUR items, as though that's a bad thing. But that doesn't follow. Suppose that someone has a debt of $100, and we spread that debt across 100,000 people. Now it affects 100,000 people instead of 1, but the debt per person is 1 tenth of a cent each. So it's not obvious that something bad affecting more people is worse. And a similar thing is true in this AUR case. I am making the contrary-to-intuitions suggestion that CCP is BETTER off economically (or, at the very least, not obviously worse off), if they do the refund.
We have potentially thousands of these bpo's in player hangers at the moment. When those go on market, their ISK value goes down, probably significantly. Now consider the player who would ordinarily buy those items with AUR. He has a choice (making up numbers): buy a plex for $20 to get ISK for 6 blueprints, or buy AUR to get 2 blueprints.
But if we do a refund, those items are not on market. Instead, those with lots of AUR are free to buy the AUR items that are closest in ISK to their converted AUR to ISK value (maximise their ISK profit). So the "problem" is spread across a much larger array of items. Now the player who would ordinarily buy those items with AUR has a choice: buy a plex for $20 to get ISK for 2 blueprints (maybe a tad bit more), or buy AUR to get 2 blueprints. The market should ideally stabilise, and thus by spreading the damage across more items, it is at least possible that CCP can increase their revenue. That is, it's not going to be as compelling to use ISK if you are the sort of person who would otherwise use AUR.
My contention is simply this: it *might* be better for CCP to reimburse, and I think it's at least worth considering. I don't have all the information I need to evaluate this question, but I'm making the point that it's not obvious that it's worse for CCP to not refund. |
Winsaucerer
The Southern Legion
RISE of LEGION
70
|
Posted - 2013.05.08 23:45:00 -
[8] - Quote
Arramakaian Eka wrote:
edit: as someone who works in corporate finance for a living, refunding AUR items at their current price would inflate CCP's liability to their customers (players). Depending on how many of these BPOs are out there, we could talk about hundreds or millions of euros. It will not happen. Period.
I acknowledge that your professional life gives you expertise that I lack, but just stating it does not help me understand. And it won't be millions of euros :)
As it stands, I think that I have provided a compelling reason to think that even if not a good choice for CCP economics, a refund isn't obviously a bad choice either. Combine that with the customers who are genuinely harmed by the lack of a refund, and then you have a strong case in favour of refund. Now, you suggest that there is some liability towards customers that CCP would increase by a refund. But I don't see how this follows. Right now CCP has a liability in terms of providing and maintaining these BPO's in our inventory. If they were to refund AUR, they would shift that liability from one system to another. It merely gives players the ability to *change* their digital stock. The system's are in place, so I don't see how this represents an increase in a form of liability. CCP needs to either maintain their AUR wallet and the ability to purchase items, or maintain their already purchased digital items. And they already do both those things, and plan to continue to do so.
But besides all this, there is the question of whether a refund will *cost* them. That's where my previous arguments enter. Does a refund potentially make them more real world $$? That seems to me an open question, and the answer is not obviously "No". |
Winsaucerer
The Southern Legion
RISE of LEGION
71
|
Posted - 2013.05.09 02:14:00 -
[9] - Quote
Zero Harpuia wrote:
Actually, what Eka meant was the part on a spreadsheet labelled Liability, not the commonly thought of idea of A LIABILITY. In accounting, a liability is wherever you stand to have lost money, whether on a bad investment, damages, upkeep, etc. Just wanted to clear that up. Going to college was now not a complete waste :D
This I had actually realised :) But I didn't think this was Eka's point, because it doesn't make any sense. You give CCP real world money, they give you Aurum in return. Aurum can be converted into whatever goods are available on market at the time. And these are digital goods. So it's not like you have a $3000 credit with a store that has to give you an item that they could have sold to someone else. CCP has an effectively infinite supply of these things...so the costs are merely in terms of server maintenance, electricity costs, and the code necessary to continue the existence of these digital goods -- code that will be in place anyway. If this is to count as a liability in the sense you describe, then it has to be the case that refunding AUR for all these BPO's is going to reduce CCP's revenue in some direct way. It's not going to in the same way a typical store credit would. It's going to in a simple way - the handful of beneficiaries of a refund will potentially not purchase some aurum for $$ that they otherwise would have. And then there's the flip side -- it may actually INCREASE revenue in terms of distributing the damage of a flood of AUR items over many items, instead of a few. That's the case I've been trying to make.
Quote:Productively, they need to give some form of refund, else their PR is gonna fall like a Dropship on a crash couse with a couple of Breach Forges, but giving a full refund at current prices puts them at a massive disadvantage and costs them, theoretically of course I don't have numbers, a ton of the green stuff.
I don't think this is the case. This is what I have been trying to argue. It is at the very least not obvious that this will be a disadvantage to them at all, let alone a massive one. Digital items just don't work in the same way as real world physical goods, though they have similarities. I'm sure you're aware of, for example, the ridiculous way some "income lost to piracy" values are calculated. There are many subtleties that must be considered.
And then there is the obvious disadvantage of not refunding, in terms of some disgruntled customers and lack of trust, which you rightly point out in a part I didn't quote. |
Winsaucerer
The Southern Legion
RISE of LEGION
72
|
Posted - 2013.05.09 03:06:00 -
[10] - Quote
Zero Harpuia wrote:They want to give refunds in Aurum for the objects, but because they can just dictate the price of an object willynilly here as has been demonstrated several times throughout the last build, the Aurum the object is now worth is far more than the initial investment, which causes a loss. I'm sure you understand this, but I just wanted to lay the groundwork because I hate it when people go 'as you should already know' and leave it at that.
This is central to the very point I have been making. The change has already happened -- the AUR price of these items has gone up. As soon as these items are able to be sold for ISK, CCP starts making a loss. It doesn't matter if they refund or not, they make a loss. My central point has been this: it is not obvious that their loss will be greater if they refund now, than if they don't refund and later allow these items to be sold for ISK (which, in the spirit of the kind of game EVE is, they should allow).
I'm not sure that you actually disagree with me so much as you aren't really commenting on the arguments I've made. So I don't know if I disagree with you, either :)
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