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Discussion on the economy post Updates post #99
While the latest economy updates have helped significantly, there are still a few remaining issues that prevent the manufacturing process from being profitable enough to sustain. Thanks to Locke for making the spreadsheet that I used to quickly calculate some of the things I will talk about here. Warning, long post with lots of numbers ahead.
Something to get out of the way first; in my view every part of the manufacturing process should be profitable. This includes miners (collectively for both asteroids and gas), refinery owners, and autofactory owners (for simplicity I am grouping both final and non-final products into this).
-For miners there is a time investment. When the alternative is to just bash, or do quests, or other activities that generate marks, taking part in this system becomes an opportunity cost. There is also a smaller marks investment in the form of probes, tethers, and scoops. Taking part in this aspect of the game and economy in general should be rewarding to a degree that is similar to the other activities.
-For refinery owners, there is a marks investment. Each costs 25k (already reduced from the 100k they are supposed to cost finally) to even buy with a yearly tax of 1288 or so marks. Owning a refinery should be profitable to some degree. In other words, there needs to be a way to generate over the tax each year. There is also likely a small time cost involved in setting up the refinery and making sure prices stay competitive.
-For autofactory owners, there is a marks investment. Like refineries, they cost 25k to buy and have a yearly tax of 1288 or so marks. Additionally, there is a further investment in purchasing materials to produce a good. Owning and running an autofactory should be profitable. In other words, there needs to be a way to generate over the tax each year. There is also likely a small time cost involved in setting up the autofactory, and a bigger time cost in keeping up with the market in general and making sure supply chains continue working etc.
There are two problems I see with the current system and numbers:
1) Profit margins
The shipforge acts as a ceiling for how much goods can be sold for. The costs of production imposed by the game act as a floor for how much goods can cost. Any area in between if how much profit can be made from doing this activity. This profit must be split between the three participants as stated above. The problem here is right now there is not enough room for profit to split between the three.
Let's just assume that the miner and refinery owner don't require a profit, and we use base production costs. Let's not even factor in the time cost involved in any of these activities. Factoring just the refinery and autofactory costs, the minimum a scoop costs to produce is around 60 marks and a tether is around 63 marks. More on probes later. For easier calculations, let's say scoops cost around 64 in total and the miner got the maximum of 160 gas per scoop. This means each refined gas costs 4 marks to gather. Let's be generous and say on average an asteroid yields 5 refined materials and we never use probes. Let's tethers cost around 65 in total, so each refined mineral costs 13 marks to gather. Adding the above two costs suddenly increases the price to produce a tether to around 81 marks and scoop to around 71 marks. So actually, the cost for the miners are even higher. If we did this and found the "break even" point for the miners, we're actually looking at closer to around 88 marks per tether and 75 per scoops. For comparison, the shipforge currently charges 91 per tether and 87 per scoop. This means the profit margin, assuming the miners and refinery owners don't care about any profit and their time is free, under more or less "perfect" conditions, is at most 3 marks per tether and 12 marks per scoop. Each batch produces 20 of each, so for all of that work, the autofactory owner pockets 60 marks per batch of tethers and a whopping 240 marks per batch of scoops. Remember, both tethers and scoops require three autofactories to produce (alloys, nonmetals, resources), so they still need to sell enough of these to cover taxes for all three.
I'm not going to go into the profit margins for the other goods because while they are a bit better, they also generally require more autofactories to produce, and aren't as critical to the process we are talking about i.e. you can't manufacture anything if nobody wants to make and use scoops and tethers.
2) Refinery and autofactory location
Currently there is very little reason to own refineries and autofactories outside of Omni and Iota. As Omni and Iota can have every single type, it is much more convenient to just put every single part of the supply chain in one of those two stations. Sure, the costs a slightly higher, but they aren't really enough to justify having to move all your resources from one station to another. We can't really fix this by increasing production costs from having too many refineries and autofactories in the same station even more because I already explained why profit margins are already low enough based on base production costs.
Outer stations can have three types of refineries and either one or two types of autofactories. For a miner, it makes very little sense to mine far from Omni and Iota because if you don't get lucky and scoop up the gas or tether an asteroid that can be refined in a nearby station, you will have to waste a lot of time just flying to another station, or waste the marks spent to buy the scoop or tether and roll the dice again on the next cloud or asteroid. You don't have this problem in Omni and Iota because you can just mine discriminately and refine whatever you get.
The solution for asteroids is supposedly probes, but they are much too expensive to use. Using the numbers I used above, they will cost about 120 marks to make, or 157 marks to buy from the shipforge. There are 7 types of raw minerals, so you wanted to waste your marks and use probes, assuming an equal distribution you would need to spend around 840 marks on average to find an asteroid you can use at a nearby station if they only take one type of asteroid. But let's just say you are always lucky and the first asteroid you probe contains what you can use. That is still 120 marks for an average yield of 5 minerals, for an increased cost of 24 marks per refined material. This basically wipes out any chance of this process being worthwhile for anyone. It's better for everyone to save their time and marks and use ship forge prices, which seem high, are in fact still much lower than the true costs of production.
Things that need to happen.
I think a few things need to happen here. First, shipforge prices need to be increased significantly again. Yes, I know this sucks for everyone in the short term, but in the grand scheme of things currently they still cost too little for any real manufacturing process to be worth it for all parties involved. Second, I think average asteroid yields should be quadrupled (if not more), and gas should be reduced to 5 raw per refined. This will reduce how much of a factor probes and tether are in determining the cost of everything.
Third, there needs to be a real incentive for putting stations in outer space that doesn't just involve increasing the costs of putting them in Omni and Iota. Perhaps the yield for refining and producing goods in those specialised stations are higher. Ultimately there just needs to be a reason for people to want to have their supply chains scattered across the sector instead of putting it all into one convenient location.
Fourth, and perhaps the most drastic, is I think the game needs to subsidise the entire process significantly. As I mentioned at the start, there is a big time investment, particularly for miners, to do this. This is the only part of the game where there are only mark sinks and no faucets. You could say it is tied into the incursion system, but hurting that just makes it a worse option than questing or bashing in comparison without actually making the game any more fun for anyone.
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Comments
In no way dismissing your concerns at all, I do just want to make it clear that the economy is designed in a way that it's a long game, riding the ups and downs and making your profits from a trickle, not a flood. You're not going to get rich overnight, or in a week, or even in a month. At the moment, there's a lot of people trying the system out (buying autofactories and refineries), as well as the arterial systems like mining and gas refining as people try to level up their captaincy through refining/market orders.
There definitely are some improvements to make in order to make this system better, because we agree that there does need to be a reward for the effort put in at all stages.
We'll hopefully have the next batch of updates to this system in the next few days to try and alleviate some of these issues.