Sunday, October 19, 2008

Ghost training: when CCP can't do maths.

In case you've missed it, CCP has once again figured how to shoot its collective foot in public.
At the time, the company's sole was resting squarely on the equally metaphorical and collective face of the userbase.
The results aren't pretty.

The axing of a core feature of EVE is coming from so far out of the left field that it actually baffles me, despite my long tenure as witness (and occasional hapless victim) of CCP's self-destructive impulses.

So, here's the story:

[The drama associated with CCP handling of the PR will not be discussed here, not because it's not both fun and sad in epic proportions, but because incredibly poor PR is business as usual with EVE management team. CCP's community management, PR and governance issues are worth their own articles, and I unfortunately foresee those becoming a regular stop for EVEisBroken discussions.]

By its namesake, Background Training doesn't require one to do anything to progress through a given skill level in EVE.
In fact, it doesn't even require to be logged in game, and that's one of the things players love dearly about EVE's skill system: as long as you switch your skills once in a while, your character develops new/better abilities, which in turn unlock new content such as ships and equipment, regardless of how many hours you can put in the game this week or month, and how you spend your in-game time.

Ghost Training is pushing that logic to the extreme by offering one of the smartest, more hooking freebies a R-POW publisher has ever come up with: character development bonus for returning players.

If your character happens to have a skill underway at the time your subscription runs out, the training keeps going on your ghosted account, up to completion of the skill level, and you get to return to a better character if you ever reactivate your account.
This creates a nice carrot for players to return to EVE and reactivate a lapsed account, and a subtle nudge of the stick to do so no later than around the day the ghost training skill reaches completion, in order to avoid 'losing' any training time.

Whenever a player burns out, is dragged away from the game by RL for extended periods of time, or simply forgets about EVE long enough to stop being a paying customer, ghost training increases the odds he or she will eventually re-sub, and it doesn't cost a penny to the service operator.

As a player retention tool, ghost training is the natural extension of background training: it achieves the same delicate balance between comfort (from knowing your character still progresses just as fast as your mates' even if you can't play this night/month) and urgency (I must log-in/re-sub or my character will 'lose' training potential).

In fact, background training and ghost training have come to stand among the best selling points for EVE, especially when pitching it to someone who has been badly burned by another MMO*'s skinner grind, and it has certainly played a big role in both the word-of-mouth success of EVE and the high player retention rates, generating extra revenue and saving CCP a small fortune in customer acquisition/retention costs over the years.

Why, then would any R-POW operator in his right mind get rid of a ninja stray dog that goes out in the night for you, steals a pig, has bacon fried for you by breakfast, and never barks or ask for a treat ?
According to CCP, the dog poo'ed on the missus' favorite carpet… or something.

WTB: Consumer economist

Somewhere around their third sorry spin of the maths-averse planking of ghost training, CCP attempted to educate the playerbase about the ebil 'sploiters who abuse the ghost training freebie as a cheap way to make ISK, by incubating readymade toons in swarms so large they threaten to break the db (paraphrasing, yet not kidding, unfortunately).

There is some merit to the idea, after a good workout session scraping the bullshit from it with a snow shovel: mass-breeders riding the Ghost Training Express potentially cost CCP money because they can train a decent 22 million SP toon in about 12.5 months worth of paid subscription time (that's a 50% cut).

I suspect CCP's rationale is: the same character, if trained for personal use, would on average exploit less efficiently the benefits of ghost training, thus charging the ebil toon breeders with the crime of expanding an occasional and minor loss of revenue into a systematic and unbearable $$ hemorrhage.

CCP's total revenue from the optimized breeding of a 22m SP char with ghost training available, using discontinuous but repeated 1-month subscription plans is 187.5 $ spread over 25 months, or a monthly income of 7.5 $/month before sale.
Assuming the toon breeder then sells the character, CCP will make another 20 $ in transfer fee, bringing the figure to 207.5 $ total over 25 months, or 8.3 $ a month.

Without ghost training, but using a Power of Two promotion, the same character could have been trained by its final owner for about the same monthly cost during the first 6 months (8.325$/month) then an average of 11.45$/months for the remaining 19 months (assuming 6 or 12 months VISA payment plans), for a grand total of 267.5$ over 25 months, averaging at 10.7 $/month.

Compared to the above ghost training scenario, that's a 2.4 $ monthly loss of potential revenue on this account for CCP over the first 25 months, totaling 60 $ or 4-6 months subscription revenue loss over the same period.

To be fair, we must account for not everyone who trains an alt being a specialist, so the potential revenue diff per account may be a tad steeper than presented above.
Between the Power of Two promotions, the various VISA pricing plans, GTCs, etc,. the average cost of monthly sub floats around 12.65$.
With this figure in mind, the potential loss of income to ghost training may increase to something like 4.75 $/month per account maxxing ghost training.

…which is some money, but also marks the line where CCP's beancounters crossed into fantasyland economics: the assumption here seems to be that retention rates are decoupled from ghost training as a paying customer bait, and customers' continuous subscriptions can be taken for granted over a 25 months span without any special effort on player retention but releasing an expansion every other semester.

Meet the Fokkers.

I have the nagging suspicion the guys in CCP's finances department really believe that if you could stop people from downloading bootleg movies from bittorrent they would immediately run to their local store and buy the exact same amount of DVDs at 20 $ a pop.

Not to disrespect the much-hyped on-board CCP economist (as I'd wage he's not invited on the floor where the grownups came up with this genius plan), but the abacus crew missed the obvious here: players don't have to keep paying their subs if they don't feel like it, and even less if they simply can't afford it.

Another point of contention is how, despite all the subtle ninja editing of player manuals, whinethreads falling into wormholes and obfuscation by devblog spam, players will not buy into the weak spin that ghost training ever qualified as a 'bug'.
Ghost training may have been a happy accident, like many good things about EVE, but it's a feature 5 years of enduring persistence have carved deep into what one has come to expect from EVE's basic featureset.

Removing that key feature on 2 days' notice is akin to delivering a car at listed price with an attached note:
"Oh btw, fuel tank doesn't come standard anymore, you'll have to order one separately from our spare parts department, it costs only 30% extra over your new car retail price. Enjoy."

150 pages of whines (and counting) later…

CCP still hasn't come to grips with the notion that players can and will cut down on their accounts and on the amount of money they pay every month for EVE.
That's either because the financial experts are passed out drunk, or they look only to where the noise comes from, but so far they haven't seen the promised mass-cancellations show on their stats.

Update for the money floor: there won't be mass-cancellations. Nothing at least that measures up to the fury apparent from the forum outcry.

Players are past being pissed at CCP, they've simply lost faith in the company having the slightest clue about what makes EVE worth playing and paying for, and a sandbox world heavily depends on how confident the players are the local gods won't randomly come and stomp their sandcastles in a drunken haze.

What is happening is: people are going into winter mode.
Cut EVE-related costs as low as you can, dump your semi-useful accounts on suckers still prepared to trade you GTC time for them, then try to enjoy one last seasonal war until your remaining accounts run out of steam and die.
Meanwhile, start looking for your next game of choice.

Those who don't have a pile of ISK handy, and no spare assets nor accounts to firesell may be tempted to raise their ISK worth of GTC by more mundane means, such as mining, ratting, dabbling in traderoutes or mission whoring, only to discover the price of GTCs has recently doubled, and at 500m ISK a pop, EVE is no longer a grind-free game.
— Cancel then, bitches, you weren't paying real money anyway !

— Well, if all those players buy their GTCs with ISK, 'somebody' must pay CCP for those GTCs, you know ?
The trade of GTCs for ISK over eve-secure has been a fairly good deal for both the players and CCP up to the recent GTC retail price increase (from about 12 $ to 17.5 $ a month): players with $$ and no time had a legit way to raise the ISK they couldn't earn in game to support their fun, while $$-starved players with too much time on their hands could support their accounts with the spare ISK they gained from whatever EVE nerds do for ISK.
Meanwhile CCP was making a decent buck on each and every of those GTCs, being the exclusive ultimate emitter.
Happy family.

Because one could only sell as many GTCs for ISK as there were people with an account to feed, this system wasn't screwing the in-game economy by injecting magic money, yet supported a healthy growth of the total number of accounts by favoring a higher accounts/player ratio… for how long ?

A check on the in-game/forum market for GTCs sales is enough to realize it's largely a seller-led market: for every WTS, there are 4 to 10 WTB in the same price bracket.
Typically, the people willing to buy a batch of GTCs from CCP to change them into ISK do so to fund a big expense/investment such as a (super)capital ship, faction/DS/officer oobergear …or a high end toon acquisition.

Sugar Daddy & the RMT'ers.

Right now, the cheapest way to get a lot of ISK from $$ is to buy from RMT'ers. This option beats the CCP-sanctionned alternatives by a wide margin.
A billion ISK these days will set you back about 35 $ by a mass trader, which is roughly twice what you can get for your 35 $ 60d GTC sold via eve-secure.

…in fact, for 35 bucks of RMT ISK, you can buy yourself 2*60d GTCs for your billion ISK, and save about 30% over the monthly cost of a 3-months VISA sub.
That's not the kind of RMT that directly hurts CCP's wallet, since in the end there's some guy buying the GTCs from CCP for $$, but we'll see in a minute why this kind of RMT matters.

For late-comers to the game, the shortest perceived way to catch up with the old-timers is to travel through time at FTT speed by teleporting into a 20m+ SP character (and the expensive ships/gear to go with it).

A 22m SP char fetches about 4.5b ISK on the market, which translates for the incubator (with ghost training) into an in-game revenue of 180m ISK/month for his 8.3 $/month investment.

If bought from ISK raised by GTC sales, this 22m SP char sells for 9*60d GTCs, or 315 $ for CCP, plus the 187.5 $ paid by the breeder to raise the toon, and the 20 $ transfer fee.
Total revenue: 522.25 $ / 25 months.

…20.9 $ monthly revenue for CCP on this account… Why would CCP point the finger at toon breeders ?
Ultimately, because of RMT.

4.5b ISK at a RMT shop will cost about 157 $ to the customer, and potentially drop nothing but the 207.5 $ it took to raise and sell the toon (with ghost training) into CCP's coffers.

From CCP's twisted abacus crew view, that's a boatload of money flying right under their nose on every toon sale in Character Bazaar: 60 $ lost to ghost training, and 315 $ in GTC sales: ebil toon breeders stole 365 $ from us and broke the db !
— But, but…

— Yeah, they can't math their way out of the open bar, I feel bad too.

The rundown on how CCP is killing the goose that laid the golden eggs.

— Let's up the price of GTCs monthly sub to 17.5 $ and the minimal GTC time to 60d to nerf ebil toon breeders !
Oops, apparently it only encourages people to:
  • buy ISK from RMT shops and buy GTCs with it (8.75 $/month beats a 1 year VISA plan by 2.2 $/month, but that's still 17.5 $/month for CCP as long as it lasts) ;

  • buy ISK from RMT shops instead of buying GTCs from CCP to raise ISK via eve-secure GTC trade (twice as much ISK for your buck, 100% lost on CCP) ;

  • buy ISK from RMT shops to buy Characters and trinkets (twice as much stuff for your buck, 100% lost on CCP).
— This is only a warmup… now let's strip ghost training, in order to lose the little remaining customer good faith we have left, and prevent dropouts from ever returning to our game, while making it more expensive for those who stay.

— WTF ? What are they doing ?

  • Multiple accounts holders massively switch to GTCs because they don't feel their VISA is safe with an Icelandic company that just screwed their contract terms (see Meet the Fokkers above), and for Euros, they're a bit tired of paying 20 $ a month too.
    They still pay 17.5 $ from GTCs… they do, right ?

  • Because GTCs are so very expensive to buy in ISK, they look for alternative sources of cheap ISK (see RMT above), or cut on their total number of accounts.
    No ! Ungrateful bastards ! We'll sue them !

  • The toon firesale sees a bunch of 40m+ SP chars go at discount…
    aha toon breeders, CCP pwns you hard ! Feel our might now ? Our plan is a suxxess !

  • Except the toon sales are paid with RMT ISK, none of which makes a dime to CCP
    Wrong ! we get fat rich on every 20 $ transfer fee, yoohoo !

  • And the ISK transferred to toon sellers is spent for… GTC'ing their remaining accounts.
    er… we make money there, no ?

See a pattern yet ?

We have more and more people opting for GTC subs, paid for with ISK (coming from in-game or RMT), and less and less people willing to buy those GTCs for real $ from CCP.
We also see people getting rid of some of their high-SP alts in exchange for ISK, which are bought by people who therefore won't have to pay the new and improved (with 100% less ghost training) years of subs to train their own main.
— RMT aside, what's the beef ?
— Well, what happens once there are not enough suckers left to buy overpriced GTCs from CCP and sell them to people who can spare ISK but won't give CCP a copper anymore ?

— Everybody switches back to VISA ?

— ...whatever.
Although I can predict with reasonable confidence CCP's move at this juncture will indeed be to cancel the GTC program and hope everything goes back to normal (it will, if a subscriber count flatlining circa 150k qualifies as normal), I've made a personal rule of not slinging feces unless I wrap them in flaming papers first: that's called constructive criticism.

My 2 ISK:

1 — Bring the price of GTCs back in line with regular subs: 60d = 28-30 $

2 — Damage control RMT: offer an amnesty period of 4 months to individual buyers of RMT'ed ISK if they convert their ISK to GTCs via legit sales (that's money back in CCP's wallet).

3 — Bring Ghost Training back, this time as a feature, and with a twist to make in financially apt.

And here's some wishful thinking addressed to CCP:

Next time you decide to implement a radical change on the gameworld (in or meta), have the common sense of explaining the rationale behind it to your users, even if it's all about money, you don't have to be ashamed or shy, they can take it.
I'm not asking you to consult the players, it's probably too much for them and you to handle, but talk to them pretending you're all grownups, it works with 4 years olds, should work for the EVE community.


PS: My development about people massively switching from other subscription models to GTC is obviously largely speculative, as I have nothing but hearsay to guess about it, but if somebody at CCP can come up with serious stats that fly in the face of that theory, a very good diner's on me.

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