Info: How MindArk profits, solved?

[Koister]

Here's a snippet from http://mindark.se/entropia-universe/ That talks about how they make money on Entropia Universe.


Income model

"Entropia Universe’s income base are the fees that users pay for acquisition and repair of the different assets and objects that the user chooses to use in-world.

In the virtual economy the user uses the virtual currency PED to purchase different objects, which the character requires. When these objects are used or worn a maintenance requirement occurs where the user makes payment in-world in order to keep their assets and objects in usable condition.

The income model means that the income increases in relation to the number of active users and also that more active users raise the activity level which in turn increases the need for repairs and new purchases.

Objects with a set lifespan have a repurchase value which falls in relation to wear. Unique objects can have a market value, which is fixed via auctions, which exceeds the repurchase value. Assets that do not wear out, such as land or property, have no repurchase value."



There have been many threads of peoples theories about what MindArk does and doesn't make money off of, But no actual proof..With many people I've seen state that it's only decay. But I think this pretty much explains it.

 

[alh]

Does that text really say anything?
Sounds extremely vague to me, and deliberately not complete.

all they say is that they take a % here and there, but not exactly on what, and certainly not how much.
"income base", just means they take it from there, doesn't say how much of it they take.
"repairs and purchases"... thats more or less anything where your pedcard decreases in value...

 

[Koister]

Does that text really say anything?
Sounds extremely vague to me, and deliberately not complete.

all they say is that they take a % here and there, but not exactly on what, and certainly not how much.
"income base", just means they take it from there, doesn't say how much of it they take.
"repairs and purchases"... thats more or less anything where your pedcard decreases in value...

It means they take their money from decay/repair and purchases at TT terminals.

 

[Zib Black Onyx]

Deposits vs Withdrawls.

end of story.

 

[Witte]

It is a very old tekst that doesnt say much. A model can be different from how it realy works. Besides, there has been plenty proof of Marco saing their revenue stream is from decay.

 

[Tree-doctor]

So MA fuck up himself with L or i dont get the point ?

 

[DoubleWolf]

Deposits vs Withdrawls.

end of story.

That's not really the end of the story, cause you're reading the wrong story...

Koister has got it right here. Well, with the addition of auction fees that weren't mentioned. People don't really seem to be able to grasp just how many of these transactions go on throughout a day. Every TT purchase for ammo, every repair or Decay on (L) items and every auction fee goes directly to MA. This is all laid out in their financial statements, so if they expect to be in business for very long, it probably wouldn't be in their best interest to lie about these things.

People get too hung up on the fact that they give to Mindark money when they deposit. But what they don't realize is that it's just like a bank. A bank doesn't profit or lose money from deposits and withdrawals. They make money off fees and interest from loans.

To say it's any different than this is to have some kind of conspiracy complex going on in your head... and if there is a WANT to believe the conspiracies, then you WILL believe conspiracies... and you will see exactly what it is that you want to see...

 

[Executor]

So MA fuck up himself with L or i dont get the point ?

So true.

I can not believe when it is said they take their revenue from decay.
If that was true, why introducing (L) items?

They just take a percentage (or fixed amount) every month from the EU Cash Value. The rest stays on the Loot Pool or whatever.

 

[Executor]

That's not really the end of the story, cause you're reading the wrong story...

Koister has got it right here. Well, with the addition of auction fees that weren't mentioned. People don't really seem to be able to grasp just how many of these transactions go on throughout a day. Every TT purchase for ammo, every repair or Decay on (L) items and every auction fee goes directly to MA. This is all laid out in their financial statements, so if they expect to be in business for very long, it probably wouldn't be in their best interest to lie about these things.

People get too hung up on the fact that they give to Mindark money when they deposit. But what they don't realize is that it's just like a bank. A bank doesn't profit or lose money from deposits and withdrawals. They make money off fees and interest from loans.

To say it's any different than this is to have some kind of conspiracy complex going on in your head... and if there is a WANT to believe the conspiracies, then you WILL believe conspiracies... and you will see exactly what it is that you want to see...

Every Ammo bought goes to MA, not on the Loot Pool?

I think the initial post was about RL money, not virtual one.

 

[Koister]

Every Ammo bought goes to MA, not on the Loot Pool?

I think the initial post was about RL money, not virtual one.

Uhh no.. The post is about how MA makes their money from Entropia Universe...

The virtual money becomes RL money lol.

 

[Moonfish]

Huummmm

We were told by MA the clothes repair was to reduce lag, not to increase profits.... Humm....


The income model means that the income increases in relation to the number of active users and also that more active users raise the activity level which in turn increases the need for repairs

Here's a snippet from http://mindark.se/entropia-universe/ That talks about how they make money on Entropia Universe.


Income model

"Entropia Universe’s income base are the fees that users pay for acquisition and repair of the different assets and objects that the user chooses to use in-world.

In the virtual economy the user uses the virtual currency PED to purchase different objects, which the character requires. When these objects are used or worn a maintenance requirement occurs where the user makes payment in-world in order to keep their assets and objects in usable condition.

The income model means that the income increases in relation to the number of active users and also that more active users raise the activity level which in turn increases the need for repairs and new purchases.

Objects with a set lifespan have a repurchase value which falls in relation to wear. Unique objects can have a market value, which is fixed via auctions, which exceeds the repurchase value. Assets that do not wear out, such as land or property, have no repurchase value."



There have been many threads of peoples theories about what MindArk does and doesn't make money off of, But no actual proof..With many people I've seen state that it's only decay. But I think this pretty much explains it.

 

[waperboy]

I'm not sure what the mystery is here - It's been stated by MA officials that their revenue stream comes from decay.
And you can be sure that they earn interest on deposited moneys.

There you go

 

[DoubleWolf]

Every Ammo bought goes to MA, not on the Loot Pool?

I think the initial post was about RL money, not virtual one.

The "loot pool" (which I'm assuming you mean total amount of money in the universe?) is like the total amount of money the bank has in the vault. And every purchase or decay that doesn't directly go to another player gives MA the permission to remove that bit of money for themselves.

BTW, (L) items are a win-win for everyone. MA gets their guaranteed decay when the item is used, instead of waiting for someone to repair the item, and on most (L) items, we get better skill bonuses. Everyone wins! Well... MA probably wins more frequently because people don't use the right (L) item for the job...

 

[Koister]

I'm not sure what the mystery is here - It's been stated by MA officials that their revenue stream comes from decay.
And you can be sure that they earn interest on deposited moneys.

There you go

See.. I've seen people say that a few times now..

But can you give me a link to this official statement? Cause a search brings up nothing.

edit: Nvm, did some more digging and found some.

https://www.planetcalypsoforum.com/...st-comments-about-decay-mindarks-revenue.html

 

[DoubleWolf]

We were told by MA the clothes repair was to reduce lag, not to increase profits.... Humm....

Is that really what they said? LOL! How would that reduce lag at all? Yeah, I bet that was purely for profits sake...

And you can be sure that they earn interest on deposited moneys.

Which is probably why it takes 3 months to get withdrawn money, because the money is likely tied up in CD's (most interest for least amount of risk) and they are just waiting for the money to mature so they can pay out.

 

[Tree-doctor]

I still dont understand how they "win" money from a L item. When u pay it, u give money to the providers, not MA.

 

[Koister]

I still dont understand how they "win" money from a L item. When u pay it, u give money to the providers, not MA.

Miners spend money on decay and probes/bombs to gather all the materials, and Crafters spend money on decay from refining those materials.

Instead of 1 person just decaying the same item over and over again. (L) Items help spur the economy, make a larger need for materials from Miners/Hunters.

 

[Nyxy]

I always thought it is pretty obvious what's the source of MA's profit. All TT value lost through activity (decay, ammo) goes to MA. Some of that lost value gets fed back into the economy, the rest stays in MA's pocket. They always feed back less than it was lost through activity (not counting income through advertising - it's probably insignificant anyway). That's also why MA will never lose against players, no matter how much some are winning day in day out. Total return for the whole player-base will always be less than what was lost through activity (whoever profits, profits against other players, not MA).

When you buy stuff from TT or when you repair stuff, the money doesn't go anywhere, you still have the same amount of PED in TT value. You need to decay (use) stuff to actually lose TT value to MA. The name Entropia Universe says it all - it's all about entropy (decay). The more entropy (decay) the player-base generates, the more MA profits.

 

[DoubleWolf]

I still dont understand how they "win" money from a L item. When u pay it, u give money to the providers, not MA.

Well they don't really "win" money. When I said win-win, I meant everyone benefited. True, you purchase the item from another avatar, but what about when you USE that item? The item has value, and as you use it, it decreases in value. Where does the money go? Hmmm...

 

[alh]

I still dont understand how they "win" money from a L item. When u pay it, u give money to the providers, not MA.

Someone once made this L object, from stuff looted by a hunter and found by a miner, and those in turn had to buy bombs/probes/ammo from the TT, so the L gun indirectly comes from the TT too.

 

[ZAN ZAN]

Whats so hard to understand - L items still decay, and are recycled constantly into economy = revenue for MA. In fact they now probably make up the bulk of constant revenue stream from low/mid level players.

They put an 177 ped korss into loot, you use it up during few hunts, and MA gets the 17.7 bucks.

So MA fuck up himself with L or i dont get the point ?

 

[Tree-doctor]

It still realy shady in my mind. Nobody have a tangible source of infos about it ?

 

[waperboy]

It still realy shady in my mind. Nobody have a tangible source of infos about it ?

It's quite clear in my mind - each time you use an item, the decay is recorded. One way could be:

1. You select your weapon - the server sets a variable DPU - 'decay per use' in its avatar data structure for your avatar.
2. You fire your gun - the server adds DPU to a 'total decay' variable (TD) in your avatar. This is no big performance deal, since it has to track the items condition anyway.
3. At intervals, the server collects TD from all avatars, sums them up and perhaps takes a percentage of it - this is the amount of money they make from decay for that time period.

And that's about it. Think in parallel for armor/mob hits.

I don't buy some of the other theories that float about, suggesting that decay is paid for when you buy items etc - I think it makes for too complex a system. Tracking the actual decay is the most logical solution, and not as big a performance hit as some would have you think.

I don't think there is any reliable source of info about this - it's mostly speculation based on a simple statement. Perhaps you can decipher the MA financial reports

 

[Tree-doctor]

Well so i still dont understand. I return having fun without any stranges questions in mind

 

[aridash]

Every TT purchase for ammo, every repair or Decay on (L) items and every auction fee goes directly to MA. This is all laid out in their financial statements, so if they expect to be in business for very long, it probably wouldn't be in their best interest to lie about these things.

People get too hung up on the fact that they give to Mindark money when they deposit. But what they don't realize is that it's just like a bank. A bank doesn't profit or lose money from deposits and withdrawals. They make money off fees and interest from loans.

you should go back to those financial statments. the only thing that we know for sure goes directly to MA is the deposits we make. you will note they are not booked as a liability/debt on the accounts like a bank would, but treated as sales. this is because they are not a bank and you just brought a load of Ped.

They make money from a combination of deposits and decay, the latter being a mechanism to ensure the total amount of Ped in circulation (and therefore potentially withdrawn) is always less than the total amount of deposits.

 

[Woodger]

I've been following this quite closely as some of you may remember from some of my posts in other threads. I even study the annual reports and i'm currently making a list of things in game which I would class as MA profit, but not what people would normally think of (outside of Decay, auction fees etc).

Heres one you've got to take into account....

When you deposit... Where does that money sit...

Answer: In Mindarks bank account (taking into allowance they're overheads etc), and they make interest in on that. If even only half of the current 'population' made a $10 deposit (over say... a year) thats almost $4,000,000 . How much interest annual interest do you think that would generate.... obviously if you play around with those numbers taking into account that most people deposit on a regular basis... not a huge amount can survive without , And of course that doesn't take into account the bigger depositers over time.

I have other 'theorys' too

 

[Woodger]

Perhaps you can decipher the MA financial reports

Already on it Made some interesting finds already that can be seen in some of posts in other threads.

 

[Henceforth]

So MA fuck up himself with L or i dont get the point ?

The (L) items come from the loot or are crafted by things mined/looted/TT So TT value is taken from the lootpool to decay on a (L) item and is gone.....

The upmark goes to the looter or crafter.

Simple as that.

If you repair a EP40 for 100 ped or you buy a Korss400 for 100 ped TT the 100 ped decays.

 

[Executor]

The virtual money becomes RL money lol.

So many people trying to guess how MA have RL money from virtual one. Why not the oposite?

Just try to think as MA would think, not as us, the player, think.

Do you really imagine that it is safe for MA to have their revenue indexed on the ingame activity? (And calculating individual decay with top-formulas? Or even calculating the decay of crafters who built (L) items?)

If you were them, wouldn't you think as:
- Every month we have deposits (D), withdraws (W), charges for salaries, etc (C) and we take our benefit (B).
- What we will give back to the Loot Pool or EU Cash Value or whatever we call it is D - W - C - B.

(It is a awfully simpler view, ofc there are dozens other parameters, including the EU existing value from past deposits etc, but what I point is that the calculation is made RL -> EU not EU -> RL.)

Now, for commercial / business / marketing reason, MA need to provide some figures. They must be high so that investors are attracted and they must be low so that players are not .

Bah, they just speak about vague formulas which can be validated by nobody ("taken from decay", they joke). And the players will burn their brain trying to figure out the formula or whatever...

Nice work by the Marketing Department!

 

[AJack10600]

I love it when people believe anything MA says...

Anything that is deposited sits on an MA bank account, they assume that eventually all deposits convert into decay, they might have a small reserve aside like banks do for withdrawals but other than that, there is no separation of player money (PEDS) and MA money (decay). Anybody who believes that is plain silly... MA need to work based on cash flow and interest on the money they own. If you read the financial reports of MA, there is no reserve booked for Player owned money...