EVE Fanfest 2013: The Invisible Hand of EVE Online

One of the most fascinating and enduring things about EVE Online is the depth of its economics. The player-driven economy has got a full decade of history behind it, operating on its own strange breed of anarcho-capitalism. In Free Market economics, there is an idea called the ‘invisible hand’. This is the idea that the marketplace ultimately regulates itself, whether it wants to or not. But in EVE’s case, there are two such invisible hands. One guided by the players and the other hand – one which players barely ever notice – guided by CCP’s in-house economist, Dr Eyjólfur Guðmundsson (or Eyjó for short).

Dr Eyjó was at the EVE Fanfest last week, where he was giving talks and presentations on the economic state of New Eden. Professorial and erudite on stage, the Good Doctor showed players endless graphs and charts about the economy, peppering them with jokes about Iceland’s fateful financial collapse in 2008. In one section, he admitted that CCP had even been uncharacteristically ‘hands-on’ within the EVE universe, after they intervened on the market to stop what they saw as a rising bubble in PLEX – a valuable in-game commodity worth weeks of playtime.

Being something of an economic dunce, but also an eager student of mad money, I decided to talk to Dr Eyjó about some of the quirks and quandaries of the EVE market. Read on for his explanation of money, ‘mudflation’ and in-game taxes, how he plans to merge EVE’s economy with that of Dust 514, and why he believes EVE’s ISK is more stable than Iceland’s own króna.

RPS: Hello, doctor. You are an expert on money.

Dr Eyjó: That would be correct, yes.

RPS: So, for those of us who don’t really understand economics very well – what is money?

Dr Eyjó: Money is, we could say, a medium of exchange and somewhere we can store value. If you want to go back in history and think about why people would invent money, imagine that you were a farmer somewhere up in the valley and you needed to go down to the shore and exchange your products for some fish, okay? You have to take your livestock down there, your livestock might die on the way, you will have to feed them, it’s expensive and so on. Once you meet the fisherman, you have to get the fish and he can only really pay you in fish, so you get more fish than you can actually eat yourself before the fish rot. But if the fisherman could sell a lot of the fish to other people and get paid in ‘cash’, he can then pay the farmer in cash and the farmer can then walk back home just with the cash because he has his value stored in something that’s easy to keep and doesn’t decay much over time. This is why gold was so important as a storage of value because gold does not decay and it’s a limited supply.

RPS: But now we just have paper and numbers in a computer and it seems very ethereal.

Dr Eyjó: Maybe it does, maybe it does – but it’s the same system. You just have to have control over the number that you allow to go into the system, and that’s the trick. No governments have, in the long run, been able to withstand the temptation of printing more money. It’s a really, really difficult temptation to withstand.

RPS: I had someone say to me once that ‘money is fiction.’ Is money real? Have I been living a lie?

Dr Eyjó: No, money is real – absolutely real. Because what you can do today is you can go out there and acquire goods with that money. But it’s still – as you said yourself earlier – it’s still just a number, and the question about what the number is is about how [many] total ‘numbers’ there are in the system. So you have to be carefully controlling the amount of money that you put in the system because the amount of money has to be in good proportion to the amount of goods and services and everything that’s in the system.

RPS: Okay, with that in mind, is ISK in EVE any different from real world money?

Dr Eyjó: No. No, there is absolutely no difference. Except for the fact that we don’t allow that money to exit EVE.

RPS: So, ISK in-game is real as well?

Dr Eyjó: [nods]

RPS: So if I went to the Bank of Iceland and said, ‘I have this much EVE ISK’, would they let me open an account?

Dr Eyjó: Unfortunately not. Because we as a company – CCP – we don’t allow you to take it out of EVE.

RPS: That’s very punitive of you.

Dr Eyjó: It’s very punitive. But what we’re trying to do with that is, by having EVE as a closed economic system we can have different rules than in real life. And we want to offer you an alternative experience. We don’t want to replicate real life in EVE. EVE is supposed to be something you can go to and be something completely different. And you need to have rules that are different than real life. This is why if you go into a corporation and you steal something from the corporation, we do not see that as our responsibility – as CCP – to go after you because you stole something from someone in the game. We say: ‘Okay, yeah, he stole from you. It’s up to you to get back at him.’

RPS: So which is a better currency then? In-game ISK or ‘Icelandic króna’ ISK?

Dr Eyjó: Now we’re getting philosophical. But yeah, it’s very very real. Because – this is maybe going to be a little bit technical – I told you earlier that the ISK in EVE, we close it off in our world because we want to keep the rules through EVE. The fact of the matter is that the Iceland Central Bank and the Iceland government have also closed ISK in Iceland. There are currency restrictions because of the financial crisis we had in 2008 and they don’t have – or didn’t have – control of the money. So now there’s a huge pile of money in the system that the Central Bank cannot control unless it just puts everything under restrictions. So, I cannot go into the bank now, give my króna and get dollars – unless I have a reason. I have to say, ‘I have a flight ticket’ then I just get a limited amount and so on, for me as an Icelander.

RPS: What’s the limit on the exchange?

Dr Eyjó: The limit is, I think, three or four thousand Euros per month, or something like that.

RPS: I didn’t know they were so strict.

Dr Eyjó: Yes! And this happened after the last financial crisis. So both currencies – ISK and ISK – are under currency controls and conditions. And there are actually *more people using the ISK in EVE than there are using ISK in real life.*

RPS: Really?

Dr Eyjó: Yes. So you tell me which one is more real.

RPS: Okay, I don’t know. I’ll have to think about it. I’ve heard people talk about the concept of ‘mudflation’ in MMOs. Is that when the price of mud becomes too high?

Dr Eyjó: No, it’s basically what happens when stuff evolves – you get more stuff in and a lot of stuff that used to be good is not so good anymore, so everything just inflates, so when you come into the game as a new player…

[an announcement interrupts the doctor. He patiently waits for the announcement to finish]

Dr Eyjó: So with ‘mudflation’, [the term] relates to the old MUD games – multi-user dungeons – that were just text-based games. If you were coming into the game as a new player after other people had played it for a long while, you would never catch up to them. It was just ridiculous because it just kept growing and growing and it was difficult to get there. In EVE we are very much aware that new players need a path in order for them to participate – they don’t need to be the best right away – but they need to participate in the game. So we designed the game in such a way so that it’s beneficial for old players to get new players with them because they can use them as scouts or they can use them as foot soldiers in bigger battles. And that’s really why we don’t think we would have ‘mudflation’ in EVE.

RPS: So you think EVE is immune to it?

Dr Eyjó: It’s not immune but you do have to be aware of it and design the system so that everybody has a role.

RPS: How much ISK is there?

Dr Eyjó: 650 trillion.

RPS: That’s everything there is in circulation?

Dr Eyjó: That’s all there is in circulation.

RPS: How do you know?

Dr Eyjó: We count it. Every day.

RPS: Every day? But presumably it comes in and out, so it must alter a little?

Dr Eyjó: Yes, yes, on my economic lecture you can see a slide that shows the balance between ‘sinks’ and ‘faucets’ as we call them. A ‘faucet’ is when ISK comes into the game, and ‘sink’ is when it goes out of the game. So we, as I have said, we have a tax – a sales tax – that is there in order to take money out of the system.

RPS: This tax, does it go on hospitals?

Dr Eyjó: [shakes head]

RPS: Roads?

Dr Eyjó: Nope.

RPS: Stargates?

Dr Eyjó: No, no. We can build those for free because we are good at programming. But it’s the same system as in real life. We take a tax to keep the system in balance… We do it in other ways where people are buying services from the computer [NPCs].

RPS: EVE is mostly about players being nasty… well, not ‘nasty’ but it is about them getting one over on their enemies –

Dr Eyjó: No, I think that’s a misunderstanding because, if you think about it, there are Alliances that have two, three, four thousand members.

RPS: But a lot of it is about the pursuit of ISK, right?

Dr Eyjó: No, ISK is a means to an end. They want to control the universe, or they want to beat an opponent in battle. In order to do so they have to have resources. In order to have resources, they have to have ISK. So they are piling on, just letting people create their own mini economic system where they create money – or create revenue.

RPS: It’s like a vicious circle! They want to rule the world to get ISK, but they need ISK to rule the world.

Dr Eyjó: It’s not vicious, it’s perfect! It’s beautiful because that’s the consumption of EVE, it just continues – this is why there’s no endgame, it’s never over. It is a system in itself and I often tell people that the best way to understand EVE is to stop putting a ‘game’ label on it and think of it as a universe. It is a universe in itself.

RPS: More like a simulation?

Dr Eyjó: It’s not even a simulation. Because it’s a universe in itself, it has rules. And it just happens on its own.

RPS: That whole universe is founded on the idea of a Free Market but recently CCP had to ‘intervene’ in the prices of something called PLEX. Can you explain what this was all about?

Dr Eyjó: PLEX is basically a timecode [a subscription – PLEX stands for Pilot’s License Extension and it adds 30 days of game time to your account when ‘consumed’ in-game]. So you can buy, from CCP, one PLEX or five or ten – or whatever you want to buy – and it becomes an item that you can take into the game and you can sell it for ISK in the game. So if you have a lot of US dollars, and I don’t have a lot of US dollars, you can buy two subscriptions – you apply one to yourself, the other one you take into the game and sell it to me for ISK. I buy it for about 520 million ISK today. So, you get a subscription *and* ISK, [while] I get a subscription that I didn’t have to pay US dollars for. I just worked in-game, earned my ISK and used that ISK to buy subscription time.

RPS: So, why did you have to…

Dr Eyjó: Intervene on the market?

RPS: Yes.

Dr Eyjó: The item is sold on an open Free Market. It’s therefore very important, for all of those who depend on having PLEX available, that the price fluctuations are not severe. Because if you have a system where you’re trying to earn money [in-game] to buy your PLEX with ISK and all of a sudden there’s a 50% increase in price, it impacts your ability to be able to play the game because you can no longer afford it. However, the price can change over time and you can adjust your systems to ensure that’s not a problem. But in this case we noticed a bubble being formed and the bubble was being formed because of a broken system in another place in the game. So there was a completely different system that gave people a bigger opportunity to earn revenue, they were using that revenue to invest in PLEXs.

RPS: What was that? What was the thing that players were doing?

Dr Eyjó: In factional warfare – another feature of the game – it was going really, really well but there was just an imbalance in the way [players] were able to acquire wealth through that system. So, we had to rebalance that.

RPS: So they got money too quickly?

Dr Eyjó: Yeah. Yes, you were able to earn too much per-hour. So, they were able to take that money, invest in PLEXs, they drove up the demand for the PLEXs, which increased the prices. So it was a vicious cycle that could have ended by exploding in our face. So we made the decision to go in, supply the PLEXs that were needed – just selling out of our own stock – to stabilise the market. That took a few days and then we had a fix already available, we got that ready, got that sent into the code, and about a week or ten days later the system was fine and it went back to its normal activity.

RPS: But then, where did you get the PLEXs for yourself from? Did CCP just ‘print’ those?

Dr Eyjó: No. We don’t print those because we only allow PLEXs to go into the system that are bought with real life money. So, our way to do it is to buy it off the [in-game] market and keep it in stock ourselves – so exchange ISK for PLEXs. Or we can reutilise PLEXs that are found on, uh… *other* accounts. That are perma-banned. We can acquire those assets.

RPS: So you’re not printing money. It’s a completely different thing?

Dr Eyjó: It’s a completely different thing. But we may impact the ISK supply by trading on the market as well, we would be printing ISK to get PLEXs out of the market. Which we do not want to do.

RPS: Why not?

Dr Eyjó: Because we want the system to be self-sufficient and sustain itself.

RPS: You also now have the Dust 514 economy – for the PlayStation 3 game that is tying into EVE. Do you have to try and add that economy into EVE?

Dr Eyjó: Well, not ‘into’ but [we have to] have them connected to each other, like two countries doing international business.

RPS: During the lecture that you gave about this, you said it was like a big country and a small country… joining currency, or something?

Dr Eyjó: Yep.

RPS: And then you made a joke about Iceland that everybody in the room laughed at but I didn’t understand. What was the joke about?

Dr Eyjó: So, in 2004 to 2007 Iceland was able to acquire a lot of international loans from foreign countries. A lot of money. Lehman Brothers, Deutsche Bank, they were all willing to lend Icelanders Euros or Dollars and different kinds of currencies, because everybody believed that Iceland would just flourish forever. And the money supply in Iceland – because that’s money from the outside pumped into Iceland – just sky-rocketed. And having a sky-rocketing money supply means there’s more money in the system but there’s still the same economic value. So the joke that I was making was very simple: That system blew up. And they should have known it was going to blow up. EVE has a lot of ISK in it because of ten years of history. A lot of ISK in EVE can mean a hell of a lot coming to Dust. And we don’t want that money to move too fast into the [new] game because it will ruin the economy of ‘slow growth’, so we have to know the balance before we completely open it up.

RPS: Otherwise Dust might need a bailout.

Dr Eyjó: Otherwise Dust might need a bailout. Or it just might not be interesting for players because there’s always this rich EVE player who comes in and buys everything.

RPS: Would you like the real world economy to be more like the EVE economy?

Dr Eyjó: I would like the real world economy to take into account a lot of things that you can find in EVE and see if it couldn’t work in real life.

RPS: But you wouldn’t like people to kill each other for money and not get reprimanded.

Dr Eyjó: No. We’re not talking about that. Just talking about the economic system.

RPS: I want to test something with you.

Dr Eyjó: Okay.

RPS: I want to see what currencies are the best. I have here a selection of currencies. [Gets up and lays out seven ‘currencies’ on the seat] This is a dollar. I’ve got an Icelandic króna. A one pound coin. I think this one is a Russian ruble. Then this is, uh, play-money.

Dr Eyjó: [picks up and inspects plastic disc with ‘£1’ stamped on it] Ah yes, okay.

RPS: This one’s a watch battery. And then finally, this paper represents ISK – Interstellar Kredits.

Dr Eyjó: Mm-hmm.

RPS: So which is the best one?

Dr Eyjó: The one that you trust the most in. The one that you believe will be, one year from now, something that you can purchase goods with.

RPS: Which one do you put most of YOUR trust in?

Dr Eyjó: Which one do I put most of my trust in? At this point in time? Well, definitely not the battery [pushes watch battery away]. The battery will run out and there’s very few people that will accept it as a payment.

RPS: It has actually run out already.

Dr Eyjó: Right, so it has no functional value and therefore it has no trade value either because there’s nobody who can claim anything from it.

RPS: Okay, we’ll throw that away.

Dr Eyjó: Okay. Play money does not work for me [pushes plastic coin away]. Because I don’t know what’s behind it, I don’t know how many ‘play monies’ are out there and I don’t know who would accept it as a payment.

RPS: Well, that’s the only one I’ve got personally.

Dr Eyjó: Okay. The Russian ruble I would trust rather than the Iceland króna. The Iceland króna is very unstable and is under currency restrictions, so I’ll put that away [flicks króna away].

RPS: Okay.

Dr Eyjó: The pound and the dollar are kind of equal, both have a government behind them who you kind of trust – not completely – but you kind of trust them so you’re quite sure it’s going to happen.

RPS: So what about Interstellar Kredit?

Dr Eyjó: Hang on, hang on. The Russian ruble. I would not trust the Russian ruble compared to the dollar and the pound, simply because it’s under restrictions as well and is fluctuating [dismisses the ruble]. I would trust this one! [picks up paper marked ‘Interstellar Kredit’]

RPS: The most!?

Dr Eyjó: Yes. Because this is the one I have control over and I know in a year’s time I can definitely buy a spaceship for it. In a year’s time the dollar might have reduced in value and in a year’s time the pound might have reduced in value.

RPS: Okay, one final test. These are all the currencies [slides coins back into place]. Let’s play ‘real or fake’. The dollar, real or fake?

Dr Eyjó: It is as real as people believe it is.

RPS: Pound coin, real or fake?

Dr Eyjó: Same answer, it’s as real as people believe it to be.

RPS: Is this going to be the answer for all of them?

Dr Eyjó: No.

RPS: Króna, real or fa–

Dr Eyjó: Fake.

RPS: Okay! Russian ruble, real or fake?

Dr Eyjó: It’s kind of real, but not completely.

RPS: Play money, real or fa–

Dr Eyjó: Fake.

RPS: Battery, rea–

Dr Eyjó: Fake.

RPS: Right. Interstellar Kredit?

Dr Eyjó: Real.

RPS: Real? Even moreso than the króna?

Dr Eyjó: Definitely more real because I will be able to buy a spaceship. There will be people around next year who will be willing to accept this one as payment for a spaceship.

RPS: Dr Eyjó, thank you for your time.


  1. jellydonut says:

    I commend this man on his patience with a rather silly interviewer.

    • Grey Cap says:

      Indeed. Although the poor man did manage to tell us some fascinating stuff before the interview broke down into “Is this monopoly money real money” nonsense. Taking assets seized from banned players to manipulate the economy is a lovely way to avoid inflation.

      • Wampbit says:

        It’s not really nonsense, it’s just emphasising the nature of the fiat monetary system. I do, however, think it was presented poorly; if the questions had been more intelligent an interesting debate regarding wealth vs. money could have been created. I would have also been interested to hear about the interactions between Eve’s economy and the corporations large enough to manipulate the economy.

        • Grey Cap says:

          You’re right, ‘nonsense’ was a bit mean (sorry). I just felt like the routine of comparing different currencies to batteries was aiming for comedy rather than an intelligent discussion, and missed really biting into the ideas it might have.

          Simple, silly comedy can be great, but the wit didn’t work for me, I guess?

          • Evil Betty says:

            I thought the battery was quite clever, as it fits into the theme of exchanging goods for goods (sans money), and is the goods you are exchanging actually worth anything?

          • WrenBoy says:

            @ Evil Betty
            I was a little disappointed that he didnt include a bottlecap. Does Brendan even play games?

          • libailele6 says:

            About 18 months ago, the same demo was released running in Flash: http://www.unrealengine.com/flash/

        • Peter says:

          It would have been very interesting to hear about some of the supposed market manipulations by corporations such as the Goon Swarm. Using fear as a motivation is both monstrous and genius.

          • Premium User Badge

            phuzz says:

            Not supposed, real. They were very upfront about forming a cartel with a few other alliances, and also through restricting any outside supply by suicide ganking any independent miners. As far as CCP are concerned it’s all in the game so it’s fine as far as they were concerned.
            More info

        • MrEclectic says:

          All money is in essence fiat…

          Even those currencies with finite amounts, like gold or sea shells or bitcoin, have their value and appreciation fluctuate. Currency is not money.

          Also, about the invention of money as a means to facilitate barter, it is a fiction, suggested during the 18th century. Modern anthropological research indicates that money was invented mainly as a means to keep track of favours owed and obligations, in essence debt.

          As for the interview, it was interesting. Even the toy money vs real currencies thing. I think that actually made a point. I just have to make a remark about Dr Eyjo’s comment about governments and printing money. Actually all issuers of money (governments or private banks) eventually do not resist that temptation.

          Greatest moments of the interview are when Dr Eyjo explains the purpose of taxes (mainly an instrument to give value to money and control its flow), and again when he empasises the issue of trust.

          Questions I’d like to have seen (delivered of course in the RPS style):
          -Is there a derivatives market? If so, how is it monitored? How does it influence the money supply? If not, why so? Players have not gone this way yet, or something in the system not accommodating them?
          -Observations and omparisons between the Western and the Chinese EVE economy?
          -Greatest crisis/bubble?

          • WrenBoy says:

            You apparently dont know what fiat money means. This should help, link to en.wikipedia.org

          • DeVadder says:

            I can answer the first. ^^

            Not really because there is no means in the game to enforce more complex transactions of any kind.
            I am sure some people would love to engage in such activity ingame but there is no governing body of the financial market and identities can be switched and renewed almost instantly and comparably cheap. Thus there is no trust between most actors and so almost all transactions have to use the formalized ingame contract system which does not allow for any sort of derivates as it does not offer a way to include any kind of dependencies on anything.

            Of course there are investment schemes but they are based entirely on trust towards the issuing party and several have been proved to be scams.
            This forum is the place they pop up in and if interested you could look at a few:
            link to forums.eveonline.com

      • Didden says:

        Actually, the real questions were quite clever, given that the marketing theme of Fanfest, was EvE was ‘Real’ :)

        • Mr Coot says:

          Yes, I agree – it was a great interview. Rather than having his patience tried, Dr Eyjo appeared to be enjoying the banter to me. The questions were perfect imo, just nicely open-ended enough to give the interviewee scope to venture where he wanted yet keeping the interview to the theme.

          Up with this sort of thing. Nerdgusted, Tunbridge Wells.

    • DXN says:

      Hear, hear. I also commend the interviewer for being rather silly. :D

    • jrpatton says:

      Seconded. Entertaining, funny interview that as also interesting.

    • DrZhark says:

      I don’t think the interviewer was silly, I rather find him very smart at asking naive questions which is different

    • JBantha says:

      You call him silly, but I learned a lot.

  2. AshRolls says:

    There are ways of turning ISK and EvE chars into ‘real world’ money (great british stirling pound filthy lucre). It’s against the game ToS and if CCP found out the char may get banned, but there are third party sites that operate this shady business.

    I know because I sold my 70M SP PVP character for £175 two years ago. I regret it sometimes but I’m glad I broke the Eve habit.

    • Carbonated Dan says:

      that’s a superb severance package for an imaginary person!

  3. Rollin says:

    So as I understand it, EVE players rioted over CCP trying to introduce cosmetic microtransactions for silly stuff like monocles that wouldn’t affect combat, but it is entirely possible to pay real world money for one of these PLEX things and then sell it for a whole load of in game money.

    So pay to win is okay, but pay for meaningless cosmetic = bad?

    • Gurrah says:

      Oh my … you’ve never set foot in EVE now have you? If you think buying PLEX with your currency of choice and then exchanging it ingame for ISK will put you ahead of everyone else you are very much mistaken. 550 million is a lot of money but depending on what you spend it on it’s either just a foothold to earn more ISK ingame or a wasted investment because whatever you will do, if you don’t know the intricacies of the game you will lose that money, sooner or later.

      In my opinion time and knowledge are the most valuable commodity in EVE.

      • Apocalypse says:

        I think you perspective on plex is a little bit off either. Whales in free2play games tend to not buy just a little bit. They would buy not one, but one hundred Plex each month. You can have lot fun with that kind of money in eve, because you can afford to lose a lot with that kind of resources.

        Spending money big enables to do some serious stuff in eve as well, just like the Russians have hired FCs that get a monthly salary.

        • Gurrah says:

          Sure, there will always be people who can afford to buy into a game on a grand scale and certainly those people will make an impact. This doesn’t change the fact though that saying PLEX is a ‘pay 2 win’-system is inherently wrong, it isn’t. The majority of buyers want to circumvent the grind or just get gametime via PLEX.

        • AsamiImako says:

          That’s not really true at all. You can buy all the ISK you want, but without investing a significant amount of time into training skills, you can’t do much of anything with it.

          You can buy enough ISK to build a Titan, but if you don’t have the skills to pilot it, it will just sit there doing absolutely nothing.

          EVE is far from pay to win.

        • Mctittles says:

          You can’t buy an unlimited amount of money within EVE. The in game time cards you buy have to be sold to other players for ISK. If you purchase too many then there isn’t enough people to buy from you or there are so many on the market the price goes down.

    • Smarag says:

      We rioted, because there was an official memo “Greed is good” with plans to introduce real pay to win like buyable only ships. Another main reason was that they wasted their development time (which we pay a monthly fee for every month, and a lot of people not only for one account) on a pointless expansion that just added this stupid overpriced monocles and some fancy 3D environment while docked that is completely pointless and adds nothing to the game.

    • Apocalypse says:

      You seem not to understand what “pay to win” is about. You can not pay to win in eve. you can pay to lose more.

      You can eleminate the need to grind ISK via plex, but it still will not give you control over the universe. That is something you still have to build on you own, even when I will admit that buying ships with plex will give you more time to actually use those ships to win.

      Those riots were about “Greed is good” which planned to introduce real pay to win items (Gold ammo and stuff), stuff that you could not just build in-game, cutting the eve-markets as middle man. Furthermore this whole cosmitic stuff was wasted time on development of space pew pew. This combination annoyed a lot of people, not to speak of all that money that was spend for 18-month on technology for World of Darkness instead of stuff for EVE. EVE Players do not like to get scammed it seems and they are rather good to notice when someone tries to ;-)

      • solidsquid says:

        Technically if you were to invest enough money you probably could buy to win by introducing so many PLEX to the market that the economy crashed, but that’d be kind of expensive

        • Carbonated Dan says:

          bulk purchases of plex have to be negotiated direct with CCP, who, presumably, are keeping an eye out for such shenanigans

    • MachineCode says:

      As others have pointed out there is a bit more to it than that. Money in eve is like money in real life: it can give you influence, it can give you power but a fool and his money are easily parted.

      Additionally with regard to the PLEX there is a different context to things I think is important. When I buy a PLEX with real-world money and sell it to a player for ISK, somebody somewhere had to acquire that ISK through normal in-game means. That amount of ISK represents a certain amount of time spent on ISK generating activities (grinding, trading etc). This means that what I am doing essentially is buying a license from CCP to play the game for x amount of time and then trading that with another player for time spent grinding. Its an exchange between two players with the value of the medium of exchange regulated by CCP. I am paying someone else in gametime to grind for me (or rather give me the product of their grinding). This means the person who did the grinding can keep playing the game without spending real world money, I can play the game without the need for grinding up ISK (which I hate) and for CCP nothing is different. They get the same amount of money for the total gametime.

    • po says:

      It’s more like pay-to-be-an-isk-faucet, because other players can, and will, take advantage of any lack of game skill that you might have, to take everything from you.

      • Batolemaeus says:

        He’d only turn into an isk faucet if the ship he buys gets blown up. And he’d be the one receiving the isk from insurance.

    • alw says:

      It’s not really pay-to-win at all. It just means that you can get more expensive stuff blown up. If two pilots are fighting each other, it’s far more likely that the reason one wins will be down to preparation and their understanding of combat systems than anything else.

  4. ark_quintet says:

    Articles like this are the reason why I love RPS. Thank you very much.

  5. Lord Custard Smingleigh says:

    The difference between EVE ISK and Icelandic ISK is that EVE is more fun to play than Iceland.

  6. Lacero says:

    David Graeber has an excellent article on the origin of money, and how it didn’t come from barter, which is worth reading if you’re interested in the first question here.
    link to nakedcapitalism.com

    The question of what money is and where it comes from aren’t the same of course.

  7. Skabooga says:

    EVE ISK is more real than Icelandic ISK? But the goods I can buy right now (and that I presume I’ll be able to buy a year from now) with Icelandic ISK are worth more to me than those I can buy with EVE ISK. Even if the Icelandic ISK depreciates in value so much that I could only buy a sandwich with it, that sandwich is worth more to me than all the ships in EVE.

    Does that make Icelandic ISK more real for me than EVE ISK? At least on a personal level, and not necessarily for Dr Eyjó?

    • MachineCode says:

      Yes I think that’s exactly what he meant.

    • solidsquid says:

      If you’re a fan of the game though you could pay for your subscription with EVE ISK, and that price is unlikely to fluctuate too much since they’re stablizing the economy

    • mickygor says:

      That’s kind of what he’s saying, yes. That being said, you’d be mad to invest in an inflationary currency as opposed to a stable currency unless you were going to immediately exchange it for more than a sandwich. Given that Interstellar Kredit supply stays at 650Tn, everything in it roughly stays at the same value (as a closed economy – that is, for the PLEX to double in value, the total sum of devaluation of other goods must balance it out as people are valuing PLEX more than other things). A spaceship might be worthless to you, but so long as it’s worth something to someone else, if you lose your house-worthy Króna investment and can only buy a sandwich, if you’d invested in Interstellar Kredits it could still buy a house. Were you willing to break ToS and exchange it for Króna :P

      Of course, this is my uninformed interpretation and could be wildly off base. The moral is – there are far better things to invest in than currency for long term investments.

      • Gesadt says:

        could also make comparison using electronic goods insread like ebook or mp3s. in that sense ebook you acquired for $ isnt any more real than the spacship for isk

  8. BillygotTalent says:

    I love these Fanfest articles. Hope he has some more of them in his pocket.

  9. ucfalumknight says:

    I found this article fascinating. And you keep on keeping on Brendan. I usually find economics to be frightfully dry and boring, I barely passed it in college. But this was put in such a way that I found it fascinating. The fact that CCP had the forethought to act when a presumptive bubble was about to occur in their economy and nipped it in the bud speaks volumes over our real world economists (yes, I understand that multiple economies is much more difficult than one closed economy). I have never, nor will I ever attempt to, play EVE, but I love reading about it. It is truly a living breathing thing.

  10. The Dark One says:

    Now, you can exchange PLEX for ISK and back as much as you want, but real-world money can only be put into the system, much like how Steam’s market place only gives you a credit in your Steam Wallet. This is to avoid banking regulations, right?

    • Snorez says:

      I’d say if you were able to transfer ISK or Plex into real currency you’d be opening up a whole can of worms about taxation and banking that would make the whole process a PITA. There are many shady pactices going on in the background of Eve’s economy. You here rumours while playing of megacorps and their financial reserves, shady financial negotiations and backhand deals with other corps. Not to mention the persistant rumor of Russian organized crime using Eve to launder their ill gotten gains… that one always made me chuckle. Something happened ?… blame the Russian Megacorps :) Eve is insane… and beaufiful.. and so deep it’s scary. I honestly believe it’s one of the greatest games ever made. I just wish it was more accessible.

    • Lamb Chop says:

      he actually answers this directly in the interview: giving the in-game EVE economy a direct tie to real-world currencies would essentially put ISK on the exchange market, and it would be integrated with the real economy. They are explicitly creating one that doesn’t function identically, so it can stay a game, and they can manipulate the rules of the economy more easily. A closed system is much easier to play with, for CCP and for the players.

  11. Keith Nemitz says:

    I braved the great uncertainty of logging into RPS to repeat an existing comment.

    “Articles like this are the reason why I love RPS. Thank you very much.”

    so true

    great article

  12. waltC says:

    Adam Smith’s “invisible guiding hand” in economics is self-interest. The idea is that out of natural self-interest people will want to do the right thing for each other in business, because it is self-destructive to try and run businesses any other way. IE, if you make lousy products, and/or you attempt to make a career out of defrauding and jipping people, your business won’t last long and you might even wind up in jail. The “guiding hand” ensures that most of the time this will not happen. (Bad stuff happens under every economic system, but probably least under capitalism, since in other economic systems it is often someone other than you who determines what your economic interests shall be…;))

    • P.Funk says:

      The problem with the widespread fauning capitalist adoration of the “invisible hand” concept is that everyone goes on and on about it while talking about “big government” when none of these people has ever actually read Adam Smith’s “The Wealth of Nations” wherein he also called for proportionally higher taxes on the wealthy than on the poor, something which most “invisible hand” lovers often rail hard against.

      Fact is that most supporters of the capitalist system don’t even understand it, nor its educated proponents.

      Fact is that even those making world decisions are idiots and know nothing, know less than Mr. ISK here even. Take Austerity. Story just came out that the 2 economists who made the most powerful push for austerity back when the crisis began, whose evidence was used by the Eurozone leaders as their argument in favour of austerity, those economists didn’t add up their excel sheets properly.

      Turns out a grad student re did the math and come to the conlusion that those Austerity promoters’ math actually supports the notion of borrowing in excess of GDP to restart an economy. XD

      The world is run by bafoons. They’ve all got agendas, but they’re still idiots too.

  13. MeestaNob says:

    These Eve articles have been my favourite thing on the site for a long while, even though I can’t get into the game myself I love reading about it.

  14. P.Funk says:

    I think the article would have been more insightful if the interviewer was even mildly aware of economics and finance. It kind of came off as someone who was deliberately playing up his “idiot” status and almost making fun of the concepts.

    Still, the professor was great to listen to. I love natural teachers, people who when they speak on a subject make the most complex ideas seem not only easy to understand but compelling. My high school economics teacher was the same way.