Thursday, June 19, 2014

Crius: Scaling Costs and POSes

One of the big changes coming in Crius is the removal of slots for manufacturing, research and invention. Instead, CCP has decided to implement a scaling cost system that increases as industry activity increases in the system. In addition, you will be able to bid on "teams" for a particular system, and these teams will have certain bonuses that will benefit you in some way.

On one hand, these changes will remove the barrier to entry to T2 production. It has been well known that the wait for research slots in high-sec is extraordinarily large. Up to now, these long wait times have made owning a high-sec research POS all but mandatory for T2 production. With scaling costs, anyone will be able to conduct research anywhere, the only limitation being finding an appropriate station and having the ISK available to install your job.

However, these scaling costs will mean that systems located close to major trade hubs such as Jita will likely experience high costs as manufacturers look to minimize the distance needed to transport their final goods to the market. Depending on the activity in the system, the installation costs might skyrocket, meaning that people will need to spread out to keep their costs down.

Alternatively, you can invest in a POS. However, the scaling cost system will unintuitively apply to POSes as well. A POS located in a system near Jita with many other manufacturers will have high installation costs just like those manufacturing in a station. Although there are linear bonuses that apply when you have more than one assembly online at your POS, for small items the sheer number of assemblies that are needed will only benefit those who manufacture very large amounts of small T2 items. To receive the maximum bonus from ammunition or component assemblies, you would need to have 50 of them for a bonus of 25%. This seems unrealistic and poorly thought out by CCP.

From an economics point of view, investing in capital should decrease your variable costs for manufacturing. Someone who installs a job at a station should have a higher variable cost because they have invested 0 ISK into the capital required to manufacture their items. If you have a POS, you need to purchase assemblies (capital outlay), so you should expect to receive some benefit. Yes, you do build things faster by using a POS assembly as opposed to using a station. But why should the installation costs in my POS be related to people installing jobs at nearby stations or other POSes? CCP justifies is as the cost of hiring skilled labour, since apparently these arrays now need workers too. Apparently, it even applies in w-space.

As a budding T2 manufacturer, I won't be taking on these additional costs as cuts into my profit. I'm expecting to see the prices of T2 items increase with Crius, reflecting the higher cost of installing jobs. We'll have to wait to see how the market as a whole reacts to these changes.

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