January 30, 2013

Warren Buffett: AFK Miner

“If Warren Buffett was walking down the street and saw a $100 bill lying on the ground, it wouldn’t be worth his time to bend over to pick it up.”  Have you heard that one before, or one like it with Bill Gates or a sport superstar?  It’s a great expression of how their wealth is on a scale completely unlike yours and mine, but it’s also logically wrong.  When you hear people railing about the “Minerals that I mine are free” attitude you’ll hear the same mistake again. Warren Buffett's ability to earn income will not be impeded in any way by picking up a $100 bill on the sidewalk.  His wealth is coming from deals he’s making, but mostly from investments he already has.  Tick Tick Tick, how does $15/second sound for just one such investment sound?

TL;DR: Minerals you mine aren’t free, but they are heavily discounted.  The level of discount for activities in Eve varies by the level of attention they need and the fun you have doing them.

Forum warriors and bloggers often compare mining returns to the opportunity cost of doing something more valuable.  L4 missions are often used as a benchmark due to their ubiquity and consistency.  You could have spent that time running an L4 and using that payout to buy minerals on the market, therefore that's the price of the minerals you mined. There’s a big assumption that they’re making there: that you can trade off one activity equally for another.  The difference of course is the degree of attention needed, and this really matters when it comes to those of us who have busy lives outside of Eve.

Lets consider if I’m responsible for my young kids some afternoon and I also want to play Eve while they play on their own.  What if they troop downstairs and ask for a snack.  What’s the range of impact to this:
* If I’m doing something PVP-ish then first off I’m a fool for trying to do it when I can’t devote 100% attention to Eve.  Family responsibilities come first, and just taking off the headset to hear what my daughter wants is likely to result in a dead ship.
* If I’m doing a mission that means I need to extract myself from the midst of the NPCs and warp to station or a safe or risk losing my ship while pouring the apple juice.
* If I’m mining asteroids in 0.9 sec it means that maybe one of my strip miners sits idle for a little while - though there is the risk of running into one of the New Order bumper types.
* If I’m updating market orders or sorting out an industrial planning spreadsheet while docked then there is practically no downside.

So yeah, mining with a relaxed attitude towards AFK may not be as good for me as running a level 4 mission when measured by ISK/Hr. But you know what, with the discount rate it's pretty nice indeed.

Now if you’re young, single and such then perhaps all of your Eve time can be 100% attention time.  But even in that group what I hear from people isn’t that way - how many sit around gabbing in channels, pausing to grab a drink, singing along to Gate Camp Strut.

So much of Eve comes back to “play it your own way.”  If you think about every moment that you could be earning ISK, could be bending over to pick up that $100 bill then I’m guessing most of you will burn out on Eve.  Yes, there are exceptions whose very way to play Eve is around maximizing ISK/hour - and that’s the exception that proves the rule.  But if we let people use their way to play Eve drive our way to play Eve - for instance, through votes for CSM - then it’s only going to lead to pain.  Fortunately, the CSM minutes show that CCP understands this too.


  1. Your path to monetization is off. "Mined minerals aren't free" because you _could_ sell them to the open market. The open market (usually Jita) sets the ISK/hr of that activity.

    The savings comes from freight time. By having the stash locally (especially in very very high volumes for low-ends), then you save the money/time that would be spent freighting.

    There is nothing technically wrong with the traditional industrial path Mine->build->sell, but the accounting for mineral cost should still use the price you'd pay on the open market. Otherwise you WILL lose ISK, since you could have saved the extra time and just sold the raw materials.

    1. You're right - that's embarrassing. That's what I get for trying to start a post and then finishing it like two weeks later without enough editing. :)

      I use the ISK per Hour right now in determining what to build, but I think I'll want to take that in the direction of the specialized spreadsheets you describe in your blog.

  2. Opportunity costs are a valid measure of the use of your time (playing Eve). But, if you have to keep an eye on tiny humans in real life, you, personally, can ignore the "lost" income from not running missions or PVPing. You, personally, don't have the opportunity to do those things, so mining is likely the most valuable use of your time.