There are many misconceptions about T2 BPO’s and I will do my best to show you why T2 BPO’s are not a big deal. They don’t give a huge advantage to those who hold them, and they don’t upset the balance of the market. Most importantly they don’t usually generate a substantial income; in fact players can make more isk trading than with T2 BPO production.
Something players need to keep in mind is that the real winners of T2 BPO’s are the owners who got them in the lottery or purchased them during the lottery at a low cost. These players have nothing really invested in the BPO and they can make a decent profit out of them by manufacturing or sell them for four to five years profit. This is important to remember because many current T2 BPO owners had to purchase their BPO’s for many billions usually valued at five or more years of profit of the BPO.
Many players say that those T2 BPO owners are able to undercut the costs of invention and therefore make more money than inventors. This is not true and the competition is why. Most T2 BPO manufactured items have so much competition that the prices are driven lower and the profit for all T2 Manufacturing suffers because of it. Now yes the BPO’s are more profitable per item, because they use fewer materials an d can be researched to use even less. However the number of items that can be produced are pretty low for BPO’s when compared to Invention. Yes the time can be reduced by researching a BPO, but what I am referring to is the limited capacity of a single BPO’s production compared to using several BPC’s instead. It is more expensive to invent several BPC’s at one time, but a higher production of the item means there is more overall profit. So a BPO is unable to out-produce BPC’s and because of that BPC’s make more money than BPO’s. Now I know what you are going to say, “Given your own logic BPO’s make more money per item when compared to BPC’s”. Well that’s true, per item BPO’s make more money than BPC’s, however as I will discuss later BPO’s profit is not in the production.
It is difficult to appraise a T2 BPO because there are so many different variables. Most ammo BPO’s will cost obscene amounts of isk because there is a high turnover and a constant demand for such BPO’s. Most of these ammo BPO’s will bring in less than one billion isk a year yet they will sell for upwards of fifteen billion isk. This means that any players who buy this BPO won’t see a return on their investment until fifteen years later, but then again the idea isn’t to make profit on the manufacturing of the BPO.
Variables for determining T2 BPO prices:
- Demand of the item – Are there only hundreds sold a day? Or thousands?
- Profitability of the item – The more profit the item makes the more it will sell for, but be aware that more inventors will compete to get a piece of the pie as well. If you are buying one look at the market to see if someone has bought the market out in order to manipulate the price of the item and make it seem like it is worth more than it is.
- Status symbol – For whatever reason players associate T2 BPO’s with wealth and if they have one then they feel that they have gained status in the community. This can cause BPO’s to sell for more than they are worth because someone wants one no matter the cost.
For an example I found a Miner II BPO for sale on the contract market to show you what I mean. Currently the Profit per year is 6.5Billion isk, however there are less than 1000 units sold in Jita each day so it should not be difficult to move all the items that you produce. The price has not been manipulated within the last 6 months, volume sold each day is normal and price range is normal. This BPO is selling for 52.5Billion isk which means that the BPO will take 8 years to pay off, but as I explain next the profit is in the reselling of the BPO after a few years not manufacturing. Whether or not this is a good investment I can’t really say, the purpose of this post is to explain why T2 BPO’s are not causing an imbalance in eve and why they have high initial costs.
Most T2 BPO’s don’t make a lot of money from manufacturing the items; rather the items supplement the true investment of the T2 BPO, which is the BPO itself. Each year the T2 BPO’s go up in cost. How much they go up depends on many of the factors I have already mentioned and many that cannot be calculated, but history has shown that BPO’s are always gaining value. Three years ago I saw module BPO’s for less than 10billion, and ammo for 2billion, now I mostly see modules and ammo BPO’s going for 20B+. Mostly for the reasons listed below:
- Partially because there is more isk available in the economy
- When players unsubscribe with T2 BPO’s they are essentially removing them from the game until they return
- Every day there are more players who would be willing to spend more isk to acquire these BPO’s.
This makes it a great investment when players have more isk than they know what to do with. This is one of the guaranteed ways to make a profit over a long term investment. Now nothing is guaranteed, but it is as close as a guarantee of profit that you can get in Eve. For example if I spend 10 billion isk on a T2 BPO within six months I could sell it for at least 12billion. Now the rate of return is quite poor in this example but if I have 100billion isk in my wallet this is essentially passive income that I would not otherwise receive. So if you have plenty of isk in your wallet and you never spend it then a T2 BPO is a good passive investment opportunity. Often there are better places to invest the isk but it those are not passive meaning the player must move items or funds around to keep the money flowing in. This is the reason that I only recommend T2 BPO’s for players who have more than 30billion isk that they do not ever touch.
The bottom line is that players should not be upset at T2 BPO’s because they don’t cause an imbalance of Eve. Most T2 items are manufactured with copies not originals and it is more profitable to produce BPC’s than to use BPO’s one at a time. Eventually most T2 BPO’s will disappear from the market as players quit and even more T2 manufacturing will rely on invention. As for those players who are looking for a good investment there are better options, but this is about as passive of an income as you can expect from Eve-Online. Just make sure you don’t overpay or get tricked into buying a BPC or manipulated BPO or you will never see a decent return on investment.
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