90% TT return

[humanwoman]

guys, this thread is not about how one can survive longest with his ped.

yeah, thanks for noticing, unfortunately no one seems to read OP and my other posts, so I don't even know why all these people are here and arguing between themselves about something I've never asked

@ op:
i fear it's gonna be pretty hard, next to impossible. i think MA states in their annual report the total turnover for entropia - but do not define turnover.

well, it's a standard report, so I believe all terms are strictly defined, probably someone who has an experience in (Swedish) accounting could decipher it for me.

all I'm saying that judging by the amount of money coming in ($7M as I understand the report), it'd be extremely risky for MA to give all the players the opportunity to get up to 90% TT return at the same time, because even if a small % of players will withdraw during the year, MA will go bankrupt.

just not enough money coming into the system to be that "generous", but, as I said before, it depends on how you understand the report, so if you know accounting and can correct me, please post your explanation here

 

[Magix]

Has anyone tried to justify 90% TT return judging from MA business data?

I mean not that 90% is the highest possible long run TT return for somebody, but for everyone?

Will MA survive if everyone will get their 90% TT return?


For example:

I guess there were numbers in the annual report about how many PEDs are cycled through the game per year, then 10% of it is MA income, would it be really enough to run the office, pay 60 employers, pay for servers etc. and make profit?

Two thoughts:
1. 90% return means 900 of 1k spent. You put that 900 back in, you get 810. You put that back in, you get 729. Etc. etc. etc., until MA gets the entire 1k. 90% returns has nothing to do with whether MA profits or not, just how fast they get all your money. At say 10 ped per loot, it might take MA only an hour or two to get all 1k.

2. I'm relatively certain that excavator, refiner, armor and fap decay are not included in the returns calculation. That's just pure profit on MA's side, which might be why crafting has pretty much the lowest success rate of any profession and is the only profession where the minimum return is lower than cost per click.

 

[forgo]

If the question is if MA can survive with 10% returns then, my best understanding is this:

The amount deposited (thus the 10% of that) on the reports is not the correct number to go off of for MA income.

The key is the yearly turnover numbers, which are in the hundreds of millions usd per year.(167 m per year as of 2008ish)

There was a debate a long time ago in these forums about the meaning of turnover, and it turns out there is a difference in definition between Swedish and US accounting ideals. Which led to a general consensus, that it meant the total amount of PED that was recycled in one year.

Its not the deposits they take the cuts from, but the turnover of all the PEDs in game for (mostly) every time it changes hands/activities are made.

Turnover generally grows in time, except in the cases where withdrawals may reduce the overall pool, or the economy is seeing a large decrease in transactions/hunt/mine/craft runs, but it still turns over and over and over with every purchase and decay regardless.

One more thing to consider is that the return rate of 90% often neglects things like skill values, which are a factor as well, thus making the unseen total returns generally a little higher. Falling more towards the line with the MA goal/statement of x ped per hour cost.

This is why deed payouts vary. The turnover varies based on overall activity.

Even on minimal server activity the auction fees and decay per day are probably pretty sizable.

I would venture to say that MA probably makes a lot more in a micro-transaction model then say most of the current popular MMOs who are going to that Free-To-Play micro-transaction model.

Facebook and gaming trends show us micro-transactions are huge business. And MA has been doing it for a long time.

If I recall they completely paid the investment/startup costs (mainly to Jan) in 3 years. Which is outstanding for any business model, especially a niche concept such as this.

Deed sales, ship sales ,Land Areas, PP deals, ect. are additional capital they get to pay the salaries and development on top of that turnover cut, and shouldn't be ruled out of income for MA, as it is a sizable number as well on a yearly basis. It would make sense to pay the developer costs in the "sales" of new areas. Either by establishing a profit share until paid, or cash payments from sales. Afterall, its virtual, the only cost in the manufacturing of a land area is the developer costs (which are fairly minimal with a working and established framework to emulate, a good engine kit like crysis, and a good team).

I wouldn't worry about MA's income much. As it is, players will be making approx 400-500k usd per year in land deeds alone, and that is just a fraction of calypso revenue.

I also think those 60 employees, don't have much to worry about either. (unless they split off to another company, but that is...something else)

at least, that is my understanding.....

 

[Konve]

If the question is if MA can survive with 10% returns then, my best understanding is this:

The amount deposited (thus the 10% of that) on the reports is not the correct number to go off of for MA income.

The key is the yearly turnover numbers, which are in the hundreds of millions usd per year.(167 m per year as of 2008ish)

There was a debate a long time ago in these forums about the meaning of turnover, and it turns out there is a difference in definition between Swedish and US accounting ideals. Which led to a general consensus, that it meant the total amount of PED that was recycled in one year.

Its not the deposits they take the cuts from, but the turnover of all the PEDs in game for (mostly) every time it changes hands/activities are made.

Turnover generally grows in time, except in the cases where withdrawals may reduce the overall pool, or the economy is seeing a large decrease in transactions/hunt/mine/craft runs, but it still turns over and over and over with every purchase and decay regardless.

One more thing to consider is that the return rate of 90% often neglects things like skill values, which are a factor as well, thus making the unseen total returns generally a little higher. Falling more towards the line with the MA goal/statement of x ped per hour cost.

This is why deed payouts vary. The turnover varies based on overall activity.

Even on minimal server activity the auction fees and decay per day are probably pretty sizable.

I would venture to say that MA probably makes a lot more in a micro-transaction model then say most of the current popular MMOs who are going to that Free-To-Play micro-transaction model.

Facebook and gaming trends show us micro-transactions are huge business. And MA has been doing it for a long time.

If I recall they completely paid the investment/startup costs (mainly to Jan) in 3 years. Which is outstanding for any business model, especially a niche concept such as this.

Deed sales, ship sales ,Land Areas, PP deals, ect. are additional capital they get to pay the salaries and development on top of that turnover cut, and shouldn't be ruled out of income for MA, as it is a sizable number as well on a yearly basis. It would make sense to pay the developer costs in the "sales" of new areas. Either by establishing a profit share until paid, or cash payments from sales. Afterall, its virtual, the only cost in the manufacturing of a land area is the developer costs (which are fairly minimal with a working and established framework to emulate, a good engine kit like crysis, and a good team).

I wouldn't worry about MA's income much. As it is, players will be making approx 400-500k usd per year in land deeds alone, and that is just a fraction of calypso revenue.

I also think those 60 employees, don't have much to worry about either. (unless they split off to another company, but that is...something else)

at least, that is my understanding.....

I'm afraid you're getting it all wrong.

Their business model is really simple;
Net income for a year = Deposits minus withdrawls for that year

MA has boasted with some numbers of "ingame turnover", which indeed is a very large number. But it's in no way related to their own income.

You could argue that the ingame PED flow does influence the amount withdrawn etc. But keep in mind then that A) not every activity ingame is an expense to the avatar (if I trade you 1k PED, there are no fees or charges, yet the ingame turnover still increased by 100 USD) and B) activities such as hunting give out a rough 90 % return on average. etc. etc. In other words it's impossible.

 

[humanwoman]

I'm afraid you're getting it all wrong.

Their business model is really simple;
Net income for a year = Deposits minus withdrawls for that year

This

If the question is if MA can survive with 10% returns then, my best understanding is this:

The amount deposited (thus the 10% of that) on the reports is not the correct number to go off of for MA income.

The key is the yearly turnover numbers, which are in the hundreds of millions usd per year.(167 m per year as of 2008ish)...

Again and again, you and other people here are making things too complicated and get confused, the base number is the amount of deposits, whatever happens ingame, fees and how you cycle PEDs - don't matter, MA overall and net profit cannot exceed deposits.

You can cycle 7M deposited for a while, your turnover will be hundreds of millions perhaps, but your profit can NOT be more than initial 7M USD.

 

[Laradon]

its 90% base return, 9% in special pools 1% revenue. 10% revenue , are you crazy? no money would be ingame in a few days, just calc how often you sometimes cycle your whole money.

on another thoughts, they could activate that for a few months, taking a EU break then and collect deed money after.

 

[Laradon]

Net income for a year = Deposits minus withdrawls for that year

That misses an important factor now. Based on the revenue turnover Ingame, they have to pay the Planetpartners too. So more like Net income for a year = deposits minus withdrawals, minus Planet partner payment. Prob there is, if theres no deposits, they cant get the money for the partner, who gets a constant earned money stream from out of the game (prob paid weekly or monthly though) and cant pay player withdrawals. Thats why they have to at least store a failsafe value of money, must not be all thats IG, just based on calculations of past years. They prob cant react to a economic crisis and the loss of nearly all deposits even short timed.

 

[fresco]

Okay look at it this way;
Deposit 100 dollars
90% return=90$
use that and your 90% return is 81$
Use that and your 90% return is 72.9$
See the pattern? Eventually that 100$ will all end up in MA's hands if you keep cycling it.

$700,000 left only if loot resulted from deposits is cycled once - I cycle loot until I am out of money, so whatever part of those $7mil is mine is all absorbed by MA...
so all the deposits (7,000,000.00) might be absorbed by MA as decay, whatever I carried over from 2011 to 2012 in uncycled peds was like 200 out of thousands...

OK, so I'm no accountant but the report for half a year says:

"Cash received from customers - 24 151 kSEK"

that is the amount of PEDs deposited, right?

It's 3.55M USD, so roughly 7M USD deposited per year.

So, if we all can have 90% TT return, MA would live on $700 000 per year?

Not a chance, MA has 66 employees, even if you pay 30k per year to each one, that's roughly 2M USD wages only.

 

[Laradon]

I can share a example from my ventures then:

A couple of 1k+ finds in these stats. biggest 2.2k if I remember correctly.

Spent tt mining 93927,08 (finder decay, amp decay and probe costs)
Return tt mining 87423,24 (Mineral return in tt)


If 1000 persons "lost" 10 000 ped each, it would bring a income of 1 mill usd. That should do it.

actualy this post proves theres special loot some money goes into apart from 90% return, cause thats more return then 90. probably some of your big ones were one from the global lottery. 90% should have been
84534,372

now the real question is: is the return % more then 90%, but one of those return factors is a rly rly late one, like you got to cycle over and over again and 5% of that always go into a pool that only will payback on a few k PED? Or that money goes into global pool and is distributed to a lucky player after some time? (thats probably it, because PED got to stay ingame not lying dormant somewhere, also it would explain why some player never get any of those big ones and some hit a few in a short time (luck factor->global lottery); also those Huge ATHs cant be explained by cycling if you hit a 200k one and you are only at 90% return _after_ that, you must have gotten rly rly bad runs and probably would have stopped playing , I guess with those they are way over 90% return alltogether, and thats money we paid in with our 10%-1%revenue loss.)

so the real return is 90%base plus X% on chance.

Actually i had a day too, when I hit 2 of those out of the ordinary ones in a short time and i can swear they put me over 90% alltogether.

 

[Joker]

BACK TO LOSING

50-300$ a day woot!