I keep coming back to this idea that VI internal to corporations in their current form is at least partly related to the problem of CX inactivity. On one hand I hear that corporate players engage in VI/barter and internal stockpiling to get around CX liquidity problems, but this “solution” to the problem makes the problem worse on the CX. So what is making this more attractive than doing the same activity on a CX?
Apparently in a corporation, the relevant information is being communicated: “I need N amount of X, can anyone help?” This type of communication is exactly the kind of information a market exchange communicates. So they are in competition with the CX. Same thing for local markets. And if “private exchanges” (in the roadmap) are implemented, that would make the CX problems worse.
Somewhere I read someone suggest having a single major CX (at least for now). Maybe that is on to something, is the game world too small for so many exchanges?
“I need X, can anyone supply” and internal arrangements are the “ghost” economy that is not tracked on the CX. And is several times larger.
More CX trade would benefit everyone I think. The problem is - this would require far more shipping of shit to & from the CX. And would require the removal of vertical bases among a group of players on a single planet. AKA corpo’s. Or severe limits\changes to how these systems work. Because that is where the ghost economy is, and where the CX liquidity would have to come from.
I don’t know the answers to that. But that’s where the “problem” (if you see it as one) lies.
Shipping costs are the reason for this “ghost economy” (good term)… well that did come to mind, yeah, I could see that.
Hopefully we don’t get a war on vertical companies, I’d rather just see positive encouragement to also engage in other activities while leaving flexibility for all strategies.
The excessive intra company trade is, again, a symptom of the lack of activity on the market.
Companies do exist with the idea of players cooperating and helping each other and I can’t see any harm in this.
The fact is, with the “high tech” market completely disrupted, intra company market is the only place where you can “sell” some items. With a competitive market, people would start trade those item for profit instead of just exchanging them for other goods.
“Fighting” vertical players is a must to have more market activity. If a player can produce everything he needs without market interactions, then there’re no reasons one should use the market. Vertical integration should be possible, but not competitive as compared to a well planned economy of scale.
I’m not sure I understand your comments about the high tech market, or why it would be bad if those items were traded for profit. Probably this is where my question below stems from somehow.
I think I agree with you that you don’t want it to be too easy to go entirely vertical, I guess my thinking is that it should get progressively harder following maybe an exponential curve or something. That curve could represent a lot of things, maybe needing to spend more time in game or rapidly climbing complexity. I think we could make a strong case that it should get very difficult to go fully vertical, the more you do it (but apparently, it is not like that in the game).
Where I’m not sure I agree or understand you is here:
Keeping in mind that lowstrife above says the internal corporate market is several times larger, do you not agree that this reasoning appears circular?
A lack of activity on the CX causes more internal corporate trade.
More internal corporate trade takes trade activity off of the CX.
I suppose there must be more to the story than just this, because that makes little sense to me from what I’ve read about it so far here. Maybe someone can elaborate on what’s missing from that process and whether we start with a or an here.
It’s not bad at all. Totally the opposite. The reason there’s such a high value intra company market is that is not possible to trade high tech items on the market since every developed players do produce them. In this moment, intra company trade is an action with near 0 cost of opportunity since you won’t be able to trade those items anyway. With a working market, intra company trading would come with a net loss (since you’re not bringing money in, you’re just transferring value between members).
of course it is and that’s why devs should intervene implementing new mechanics to counter this phenomenon.
Players trade on the LM instead of the CX because it’s more convenient. You don’t have to ship goods to the station and back. Plus you can implement something similar to futures trading whereby purchase contracts are organised for several days in advance at a fixed price.
Corporations use this same mechanism even more efficiently, because the players trust each other and have agreed on a set of prices beforehand.
So It’s LM trading in general that reduces CX liquidity. “Corporation shadow markets” is just putting a fancy name on one aspect of that. I don’t think anything can be done about this without severely limiting LM trading. However, players like using the LM, and playing as part of a corporation, so anything along those lines would have to be done very carefully.
In any case, given that low tier items are plenty liquid on the CX, there are clearly enough players in the game to support lots of CX trading in general. The lack of liquidity at higher tiers is more to do with the balance of the tiers in the game itself. There isn’t much demand among players for higher tier products because the production recipes, consumables, and material usage are all heavily skewed towards the lower tiers.
The devs are fully aware of this issue, and over the last year many proposals have been made for ways to address this, so for now we just have to wait and see what they decide to implement.
I disagree. I think the cycle doesn’t exist. Players use the LM because it’s more convenient, and usually cheaper, once you factor in shipping costs. And they play in corporations because playing in a corporation is fun.
You could argue that if there was more CX activity then the prices would reduce down to LM levels, but a) then the players selling on the CX would make less, so they will reduce activity until prices rise again, and b) LM prices would also drop to compensate.
Cool, that makes sense. I was going to lump LM into the same problem when I was typing that up above but I wanted to keep it simple. And I do agree that cooperation like this isn’t something we want discouraged… tricky problem. Finding a buddy in a corps that you can work with would definitely be more fun to coordinate instead of relying on the CX.
I feel like all of that sounds like it happens at once, including “the cycle”.
Sounds like you’re saying LM/Corps trading is out-competing CX due to expensive shipping costs. I wonder if this is in part because the CX locations were artificially determined, instead of arising naturally from real trade.
In a real universe, with billions of participants, each planet would have its own CX. In fact in the previous iteration of the game, the CXs were on the four main faction planets. But that just gave a significant advantage to players who put their first base on one of those four planets. So the CXs were moved off world to make secondary worlds and inter-CX trading more competitive. I think it was the right decision overall.
The downside is that it probably did result in the LM being used more instead.
What I disagree with is that lack of liquidity on the CX drives LM usage. There’s no reinforcing cycle at work here. Players just prefer to use the LM if they can. For example, they use it for RAT and DW, even though there is plenty of those on the CXs. In fact if you scroll through the LM listings, you’ll see that most of the adverts are for the exact same goods that are most liquid on the CXs.
LM is more convenient for people on the same planet only, not for everyone. For high tech materials, transport costs are very low compared to the value of the cargo. The problem is that if you look at high tech materials charts, usually there are less than 30 transactions per month (if any at all) and it is simply not worth to immobilize those assets for such a long time hoping to sell the goods.
Ahh okay so then I think you’re disagreeing slightly with my own guess and what some others have suggested here. I mean what you’re saying makes sense, LM is convenient and a bit cheaper, I just don’t know if that explains the entire story.
Sorry I’m not trying to cause debates, just brainstorming this stuff out loud, it’s an interesting microeconomics thought process.
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.
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 . 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.
“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.
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.
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.
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. I am working on vertical integration to lower expenses even more but more importantly, to ensure availability of inputs.