Introduce Economies of Scale to stimulate market activity

Feedback
34

A lot of products are “intermediate”.

A lot of producers of said intermediate products aren’t exactly selling (or buying) them. I make a ton of HER for KOM and FIM. 10% of it ends up on the cx, maybe. Compare that to the volume of KOM which is publicly traded, it’s pitiful how much HER is publicly traded.

Apply this to many other common intermediate products that aren’t T1. THF, DDT, BGC, BCO, if you’re gonna bother making these, 95% of the time it’s because you internally have a consumption requirement for it. And maybe, maybe you’ll sell some of the excess on the CX.

This is how the entire high end of the market works. There aren’t really strong incentives to not vertically integrate the entire production chain. Or work with one other key player who compliments you, especially when dealing with high tonnage\volume production chains on a single world. We don’t see much LIO or HAL being publicly traded. HAL is consumed on-world to make CL, same for LIO to make LI.

So - what we end up seeing is by far the most commonly traded items are base commodities like Hydrogen or Oxygen. T1 items. And finished production chain goods. All of the consumables. Prefabs. Consumables for ships and the like.

2 Likes
35

Just as in real life, the current CX price of whatever commodity may or may not be favorable to you at any point in time depending on your situation. That is why the CX should be your market of last resort, not first. IRL companies contract privately to obtain the best pricing, availability, or to quickly move product. You should do the same.

As a new player, I make deals with sellers to buy raw materials direct (private contracts or LM) then sell on the CX when prices are high. I use what I produce to keep my expenses low then sell the excess to keep my profit margins high ~70%. When my inputs get low, sometimes I have to scramble to find another seller to deal with and if I can’t, I have to buy on the CX ewwwwww :nauseated_face: :face_vomiting:. I am working on vertical integration to lower expenses even more but more importantly, to ensure availability of inputs.

The issue you raise will become a non-issue when there are more players in the game. If you are trying to force players to put product on the CX, you are going against normal market/human behavior.

1 Like
36

“normal market behaviour” is to have one company producing a single product (or class of products), depending on other, equally specialized, companies to gather the inputs. Vertical integrated companies do not exists IRL.

Also, companies tend to use “CX”, aka commodity markets.

1 Like
37

Part of the problem here may be that if we were to only produce a single product, or a few very similar products, this wouldn’t be very interesting.

1 Like
38

You mean like Berkshire Hathaway, Amazon, Alphabet, Meta (formerly Facebook), Procter & Gamble, Unilever, Diageo, Johnson & Johnson, and Warner Media. These are all conglomerates. They offer several products across different classes.

Many diamond companies are vertically integrated.

Smaller companies tend to buy off of CXs. Equal sized companies do back room deals.

1 Like
39

Sounds like “corporations” in the game.

It’s hard to speak with generalizations on this stuff, it seems everywhere you look there’s exceptions to the “rules” that someone can point to.

But yet the problem remains - the CX markets kinda suck due to inactivity. Is there no way to fix it?

40

Let’s not, as always, start going the route of “this is how it looks in real life, therefore it should look like this in game”.

Plenty of people, myself included, want to be able to openly trade on the CX if they so choose. Other people maybe want to use the LM to do private deals. This by itself is not a problem at all. It doesn’t matter how Amazon does what it does. What would be a problem, though, is making private dealings “OP” compared to CX trade.

I don’t know if this is the case currently and if so, to what extent. I have no problem predominantly trading on CXs and I set my bases up for that from the start. If LM trade is “OP” compared to CX trade (across planets), it should be addressed. But that is a heavy “if”, because again, in my experience relying on CXs is a perfectly viable strategy (excluding some inputs for a few high-tier MM products). Although that is just my opinion based on my own experience. It’s tough to compare viability when no one really knows how much money someone else is making, but whenever I looked into vertical setups they seemed to result in rather meager profits (again, excluding some high-tech MMs).
If you like the LM, make products that fit into this playstyle. If you like the CX, make products that fit into that playstyle.

The, imo, simple reason for “low” CX liquidity(In quotes because what really is low? Low compared to what? NYSE?) is just a low player count. It is not a self-reinforcing cycle (as, I think, lowstrife proved with his RG business, though I didn’t look into it a lot). Sure, you could increase CX liquidity by making LM trade worse in every way possible. But is it a healthy decision for a game to inhibit a huge chunk of their player base to play the way they want and “force” them (by heavily disincentivizing use of alternatives) to use the CX just so another chunk of the player base can play the way they want?
Arguably not.

2 Likes
41

The names you cited are just holdings, they do not produce anything but holds brands that actually do the stuff.

42

I don’t think LM trade or private contracts are OP at all compared to CX. LM trade is complementary to CX trade and since planets tends to be much more specialized than players (due to CoGC bonus), they will never be as active as the CX could be. Also, there is this misconception that transport is a plain cost, but in reality it may be an investment as price is not equalized in every CX. It may be very convenient to travel even long distances.

The main reason CX is not used is because players can vertically integrate and produce everything they need. The only players that actually use CX are those not yet able to produce everything they need and the one selling their surplus.

1 Like
43

The CX is used a lot. It’s just mainly used for beginner products.

The reason for this is game balance - there is no trading of higher tier products because nobody is making them because there is not much use for them in game. Basically, unless you are going to make ship components, there is no reason to move much beyond tier 2.

Let’s look at an example. WIN is one of the highest tier luxury consumables you can make, and DW is the most basic and easiest consumable. DW is kind of boring, you just purify H2O. To make WIN, you have to grow grapes, which require an orchard, and DDT chemicals, and then you ferment them with other ingredients. Sounds cool, right? I bet plenty of newly joining players look at the agriculture track and have a goal of making WIN one day.

Hold your grapes, son…

There are several million pioneers in the game, consuming 4 DW per 100, so that’s demand for at least 100,000 units of DW per day, not even including other worker types.

WIN is only used by scientists, at a rate of 1 WIN per 100. And there are barely 200 scientists in the whole universe, so that’s a total demand across all players of 2 units of WIN per day.

So, is it surprising that WIN is not heavily traded on the CX? No, it is not.

And this has nothing to do with vertical integration, corporation shadow markets, or the LM being over-powered. It’s that there is barely any demand for WIN in the first place.

The game balance of the tiers is such that everything is skewed towards the lower ones. If the devs want more production and trading at higher tiers, they need to change that balance. That is all.

4 Likes
44

All I have to say is one small correction.

Circe alone has 459 scientists. Phobos has another 312. 882-b has 220.

There are give or take 2,000 in the verse’. So it’s 20 units of WIN\day.

This doesn’t invalidate your point - but just wanted to put that out there.

1 Like
45

What if CX trade were very directly incentivized?

If you make a CX sale to a non-MM you accrue some sort of untradeable token, kinda like tickets in skeeball, at some fixed rate based on the revenue amount.

I don’t know what you can exchange the tickets for. Immediate reduction of production queue/flight times?

46

There’s only 1 thing that will increase public trade between players and it’s if the cost of outsourcing to someone else will always be lower than the cost of doing it yourself, plus risk of market going in the wrong direction. In this equation there’s transport costs that are fairly high for T1 products due to their low value per ton and opportunity costs of holding on to materials, which translate into wider CX spreads.

In other words, if I’m farming and the market price for H2O is 20, then I should be unable to settle an H2O rich planet and get it to my farming planet for under 20. The H2O pumper might be able to get it to market for 16 and my cost would be 24, so unless I want to remove market risk, I stand to cut costs by 4 by outsourcing to the market. Right now, I can settle that H2O planet and get it for 16.

There are a lot of ways to achieve this, but not with the current economic model because it treats every planet as individual entities and player companies as a loose collection of these entities. Some examples are global player experts, corporation specialization, more dimensions to shipping than tonnage/volume, a prohibitive cost to move a single ship between Planet A and B instead of 2 ships going Planet A <-> CX and Planet B <-> CX, shipping as a player specialty, specialized CXs on each planet and physically delivered futures. Essentially anything that breaks vertical integration by creating a price advantage to outsource, which can be tested by my first statement.

1 Like
47

Simply going and doing everything might be simple well after it is not. It’s not so simple, at least for me yet. It’s opportunity cost.

Maybe eliminating water as a concern/cost for yourself makes it high-priority.

Maybe you’re shooting yourself in the butt because saving 4 credits per water even when you go through 5k water per week is still only 20k credits per week. I’m gonna bet there’s things you could’ve done with both your capital and logistics capacities (ships/HQ) which would’ve been more financially beneficial than 20k credits per week, even accounting that you may now also have extra water to sell.

49

I strongly oppose this based on my previous post:

Sure, you could increase CX liquidity by making LM trade worse in every way possible. But is it a healthy decision for a game to inhibit a huge chunk of their player base to play the way they want and “force” them (by heavily disincentivizing use of alternatives) to use the CX just so another chunk of the player base can play the way they want?
Arguably not.

The LM shouldn’t be arbitrarily disadvantaged beyond what’s necessary/consistent (such as LM fees). Otherwise it would be exactly what I outlined above.

If people prefer playing in a more cooperative, person-to-person style, they should be able to do that without being punished for it mechanically.

1 Like
50

I’m sorry to say I’m not a big fan of the token idea either. Mainly because I’d rather see the CX flourish “naturally” without super arbitrary artificial interventions to force the issue. Hopefully by providing a realistic enough economic environment to replicate the motivation that created them IRL. (Don’t ask me how, that’s why it’s a “hope”.)

51

I’m not a fan of the token idea either and I don’t think it is necessary to use incentives to encourage people to use CXs: in an healthy economy, people do naturally tend to concentrate the trade in few trading centers to maximize the chance to find buyers and sellers.

What is needed is a stimulus to increase inter-player trade and they will naturally reach CXs to sell their goods and buy their supplies.

52

Anything that “sounds like a government program”… :-1: :laughing:

53

One very easy and powerful tool to encourage collaboration and discourage vertical integration would be to buff the HQ bonuses that apply empire-wide.

Right now you get a 3.2% bonus, which is more or less meaningless, which scales with # of empty permits you have, which becomes extremely expensive. This should be vastly more powerful to encourage specialization within a group of industries.

Construction +10%, Metallurgy +8%, Resource Extraction +6%.
Manufacturing +10%, Chemistry, +8%, Electronics +6%
Fuel Refining +10%, Resource Extraction +8%, Chemistry +6%
Agriculture +10%, Food Industries +8%, Resource Extraction +6%

You would have a seperate HQ upgrade chain which would increase these bonuses. Scaling up to +25%, +20%, +15%. This would create incentives to specialize within one industry group and outsource other production of items which aren’t part of your HQ bonus structure.

This could also apply unique buff’s and bonuses to ships. Someone with a Construction and Metallurgy specialization gets a buff that any metals or ship parts carried in their ships are “half weight” so that they can more easily transport them around due to their extreme weight. This is another buff that encourages them to spread out and makes transportation of said metals much easier.

I, more or less, buy raw resources. Water, hydrogen nitrogen, etc. I sell everything from KOM, GIN, rfabs, EPO, RG, POW… I buy zero intermediate products and I self-sustain and self-produce everything else internally, including all of my workforce consumables and such. Because it’s most economical to do so.

Perhaps changes like this would create more economic incentives for people to collab more and trade intermediate products on the CX more.

5 Likes
54

Yeah I don’t like the ticket idea either. Better to sling the clay pigeon and let others shoot it than try to do both. Ironic, huh?