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Under the hood on trade, part 2!

Hello everyone!

For this second installment of trade, we’re going to finish explaining how trade works and go into some detail of how you can use trade to your advantage!

When we left, all of the trades in the Empire had been reviewed for the ability to fufill; i.e. does a planet have the resources to fill the order, and do they want to? In other words, just because a planet has 50 Rare materials, that doesn’t mean that they want to export them all (every planet has upkeep) So, with that in mind, a viceroy must determine what’s best for their planet. It might be that they are aggressively trying to raise cash so that they are looking to sell more inventory and bring their planet to profitability (having a money-losing planet unnerves Pops, who don’t want to live on a planet that can’t sustain a profitable economy) or they’re just greedy bastards who want to take more of the personal cut (Viceroys typically get 5% of all income on a planet, AS LONG AS IT IS PROFITABLE, which increases their Power and ability to do things like assist with Projects).

So let’s look at the next step, determining profitability.

Now determining trade profitability for the Celestial Empire.

Viceroy Gluttony: -4 Trade Aptitude: 9 Humanity: 52
Trade hub Juthrbog’s viceroy will not consider trades with less than $1.6 BCs per trade.

So Juthrbog’s viceroy is now examining trades that they have put under review by profitability. They make a determination of how profitable a trip needs to be in order to accept it. Remember, Viceroys have a limited number of fleets that they can deploy at any one time, and they are real objects in the world – if a fleet takes a very long time to get from planet A to planet B, those ships will not be available for quite a while, so the viceroy has to make a cost/time/benefit analysis to having those ships unavailable for a while. In future builds, Viceroys will also make decisions based on relationships with the requesting Viceroys, meaning they will ‘cut a break’ with Viceroys that they have an allied or friendly relationship with.


In this case, they have a Gluttony state of -4, which is about normal (0 is considered ‘average’, and the scale is -100 to 100), so they’re not particularly greedy. They have almost no trade aptitude, (0 to 200) which means they will usually not select the ‘best’ deal and be weighted for other things, like helping their friends and ensuring that food and energy go to planets that need it, emphasized by their Humanity of 52 (pretty high). So they’ll basically take deals that help other planets more, all things being equal, and not look to make much profit. In this case, however, Juthrbog is not reviewing any trades this month, so the program moves to the next hub.

Viceroy Gluttony: -45 Trade Aptitude: 102 Humanity: 43
Trade hub Meide’s viceroy will not consider trades with less than $2.7 BCs per trade.
Viceroy is considering trade with Juthrbog for Energy. The current profit per unit based on prices and energy needed for the trip is 0.0 BCs, with total profit of 0.0.
…. After careful consideration, this trade is denied! Not enough profit to make the trip.

So Meide’s Viceroy has a very low Gluttony, but a very high Trade Aptitude, meaning that they will tend to take smart, profitable trades even though they have a pretty high Humanity. So, their floor for a trade is $2.7 BC’s (billion credits) per trade, as opposed to Juthrbog’s at $1.6 BCs. Juthrbog requested 2 units of Energy for $0.7 BC’s total (for an average of $0.35 BC/unit, less than what Luminescence was offering, remember?) With the distance this trade will have to travel, and the low amount requested, this trade would actually LOSE money, so not surprisingly, it is kicked to the curb swiftly by the incredulous Meide viceroy.

Viceroy Gluttony: -86 Trade Aptitude: 99 Humanity: 33
Trade hub Voluspa’s viceroy will not consider trades with less than $0.2 MCs per trade.
Viceroy is considering trade with Illitch for Basic. The current profit per unit based on prices and energy needed for the trip is 0.3 MCs, with total profit of 0.6.
…. After careful consideration, this trade is provisionally accepted, pending sufficient fleet availability! Final cost of trade, including fuel and shipping: $2.2. Total expected profit: $0.6.
Viceroy is considering trade with Luminescence for Basic. The current profit per unit based on prices and energy needed for the trip is 0.3 MCs, with total profit of 2.7.
…. After careful consideration, this trade is provisionally accepted, pending sufficient fleet availability! Final cost of trade, including fuel and shipping: $9.8. Total expected profit: $2.7.
…. There are excess potential trades for number of available fleets! As a result, the trade from Voluspa to Illitch is denied due to other trades being more profitable!

OK, now Volupsa is up. They’re looking at several trades here, including with Illitch and Luminescence. Now, remember that Volupsa only has 1 available fleet? (they only have 18 Merchants, and it takes 10 per active trade fleet) So they need to make it count!


With a super low Gluttony, this Viceroy is not really interested in profit for himself, so it comes down to which trade is smarter for the planet? Illitch is requesting a trade for 2 units of Basic for $0.58 BCs per unit. Pretty good offer, but the volume is low.


Luminescence, however, is asking for 10 units of Basic for $.6 BCs per unit. Better offer, and more volume. That’s why the total expected profit is much higher ($2.7 BCs vs. $0.6 BCs) Even with requiring more fuel and ships to sent 10 units, it’s still an equal profit per unit for both trades, so volume wins out. Even though both trades were accepted, since Volupsa can only create one trade fleet, the trade from Illitch is denied in favor of Luminescence! Yay!!!

And the trade (white ship) is now on the way to Luminescence! Yay!! It should arrive in 4 months, as seen by the text above the ship.

So all’s well that ends well. Volupsa made a profitable trade, Luminescence is getting basic materials that they need, and they didn’t pay an exorbitant price. As more House diplomatic dynamics are fleshed out, there will be more emphasis placed on relations between Houses and the Empire, and between Houses with each other.


So that’s great and all, you ask, but how can I use this to my advantage? Ah, young Emperor, you have asked a great questions. Let me explain.


The most important concepts to understand is that YOU DO NOT CONTROL TRADE. You can direct its flow, and you will soon be given the power to embargo planets, systems, or even whole provinces from trade, but until that time your power lies in creating the infrastructure required to trade. If a system does not have a trade hub that is not connected to a larger province hub, they can only trade with planets in their system with a trade hub. A connected and large, province-spanning Trade Group, however, connects ALL systems within its borders as long as the system has a hub. So in the example above, the Ipabog system is cut off from the Podaga trade group because they don’t have a system hub. However, when/if they build one, their proximity to the hub influence of both Percunatel and Podaga (the big purple circles) will ensure that they will be added to the Podaga trade group once they have a system hub built. That will have several effects:


* The Pops in Ipabog will be happier since they will have access to more goods (their Retail Sector will improve, which increases Happiness and generates income)

* 2 more planets will be added to the trade group, meaning that there are more possibilities for trade proposals, and thus more competition for better trades

* For you, this means that materials generated in the Ipabog system will now have a way to get to the Podoga Province hub, which means more supply fleets will be generated, meaning more materials for the Empire!

So in order to facilitate trade, you need several things to happen:
* You need merchants, who are drawn to larger trade infrastructure planets (the bigger hub and starbase, the better!) With more merchants, you can…
* …Have more trade fleets, and a larger retail sector, which can generate more income, which allows….
* …Your planets’ Average Development Level (ADL) to increase (representing more affluence and development), which allows…
* …More Pops to move to your planet, since they see wealth and opportunity, which allows…
* …More Factories and Mines to be built, which create…
* …More excess Trade Goods (materials) that can be sold at a profit by…
* …Merchants, who are drawn to larger trade infrastructure….

And that’s the circle of trade, when it’s executed right. Of course, you need competent Pops and Viceroys to make this work, which we’ll explore in this evening’s blog detailing Viceroys.


Until then, have a great day!

-Steve

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Developer Diary #2 – Economic System: Retail, aka Buy! Buy! Buy!

Hello everyone! In advance of the LP that will be out later tonight, I wanted this week’s DD to be focused on a new concept that’s really pretty neat, I think, and certainly unique to 4X-type games. I will be going over the economic system in detail, but because it’s pretty intricate, I will be going over chunks at a time, so as to dive more in depth into each system. First, retail!

 
So, to understand where retail fits into the planet economy, you have to know that all planets have a Gross Planetary Product (GPP) that is comprised of 4 ‘parts’: the ‘base’ GPP, retail revenue, trade revenues, and import costs. This GPP is used throughout the year to set an import budget (to allow the viceroy to know how much they can/should spend on imports) and to improve the ADL (Average Development Level) of the planet by building infrastructure. While most of the ‘economy’ is based on goods and materials, the GPP of the planet is important for one critical reason: it funnels tax money back to the empire (and by proxy, you), the province governor, the system governor, and the viceroy. Since money and power are two lifebloods of AotSS, it is critical that both the Empire (and you) and Houses have as much as possible. Poor planets are worth very little, and provide very little wealth and power to Houses who Hold them.

 
With that in mind, let’s talk more about retail. So in AotSS, retail is somewhat abstract, and is based around 4 things: merchants, their skill, the planet’s ADL, and the number of Pops on a planet. (There are some other things that can affect this, like Viceroy skills and traits, or planet traits, but these are the main levers.) Basically, the idea works like this:

 
1. CALCULATE THE MONTHLY ALLOCATIONS TO THE RETAIL SECTOR: A yearly percentage of a planet’s stockpile of food and energy (and basic if the viceroy or emperor allow it; heavy and rare materials are mostly used for military and space technologies and would not be widely available for retail as we know it). For this example, let’s say 4% is the hold percentage that the viceroy has selected for their planet. So by using the formula (x * .04) / 10 (for 10 months per AotSS year) we can calculate how many goods are put ‘on the market each month.

Let’s work our way through an example on the planet Argus. If we assume, say 10,000 food units are in Argus’s planetary stockpile, and we’re holding 4% yearly, calculating the monthly food units available for retail on Argus comes to 40 units (10,000 * .04) / 10 = 40.

2. DETERMINE THE MERCHANT EFFICIENCY: The next step is determining how effective your merchants (and remember, these are merchant POPS, not individual merchants, representing a million units with an average skill level and culture between them) are in actually selling the goods to the citizen Pops on the planet. So while I’m not going to give the exact calculations, I will give enough information so that you understand how best to utilize retail. The merchant efficiency (ME) is calculated using the merchant skill and total merchants on the planet to determine a ratio from .01 to 3.0. To get the best ratio, you need either a lot of Merchant Pops or highly skilled Merchant Pops (there is a bonus to efficiency after 50 Skill, 50 is average, and below 50 is a malus).

For the purposes of this example, let’s say the ME on planet Argus is .35 (there are only 20 Merchant Pops, and their average skill is 41). 

3. DETERMINE REVENUES FROM EFFICIENCY: So now you’ve got a set amount of food out on the market, and you have an efficient (or not so much) merchant corps distributing it throughout the planet. Great! There’s 2 other things that determine how much the planet actually wrings from a given retail network: the good price on that planet, and the ADL of the planet. Since ADL is derived mostly by the types of Pops that are on a planet, you’re going to have scientists and engineers who make more money going out to expensive restaurants and buying nutritious organic food, not your miners and farmers. So: the higher the ADL, the more money made.

So for our example, on Argus it’s a nice planet and there are a lot of scientists, government folk, and engineers, so the ADL is 17 (pretty high). After determining how much of the food is actually sold, the result is 11.5 units (Available Food Units / Merchant Efficiency) * (Average Merchant Skill / 50). That’s a lot of wasted food. So the last step is to determine how much revenue is made from those 11.5 units planet wide. We simply multiply the amount of goods by the current food price on the planet (we’ll say $.10 to keep it easy), and add a variable for the ADL (17) and… congratulations! Your merchants made $19.5 billion crowns (BC) from food this month!

4. DETERMINE THE PLANET’S CUT: Great! You now have your merchants out on the planet, hopefully finding a market for the finest food and finding buyers for every bit of goods you have allocated. One last thing: what part of that amount goes to the GPP? Easy. There’s a commerce tax that is set by the viceroy that determines how much of the profits the merchants make stay in their pockets. Keep the tax low? Not as many revenues, but your merchants will love it (and will stay, increasing their skills, and a planet with such a progressive tax structure for humble merchants will attract other, good merchants as well). Jack up the tax? You’ll get a quick spike in revenue, but be prepared for merchants, grumbling about oppressive fees, leaving for greener pastures. And your other Pops won’t love it either as their favorite retail establishments close up shop as well, leading to unrest and lowered Popular Support. So smart viceroys do not increase this tax too high unless there’s dire need. This is changed every year at the start of the year, like all other taxes and the Imperial Budget.

So for Argus, the viceroy set the commerce tax at 15%, so the empire’s cut (what goes to GPP that month) in food is only $2.9 BC. That’s our final number!! Remember that the same calculations are made for your energy sector and (if you have allowed it) basic materials as well.

So what happens to the goods that don’t sell? Well… they’re gone. That’s why it’s important to not set your retail allocation very high especially on a new planet. You won’t have the Pops or Merchants to support tons of retail, and the goods that are unsold are basically wasted. And if you waste too many goods, you risk running low on food or energy (or Basic) which creates its own issues. So don’t be greedy – you can overrule the viceroy on any given planet, and usually they’ll be OK with it unless you try to set the value too high, but be judicious. Also, you have the option to allow your Basic stockpile to be released to the retail allocation and since prices on basic units tend to be much higher than food or energy, this can be a quick way to boost your retail sector.

So some of you may be asking – can the retail sector cause prices to change? No. Remember that on a global scale, retail in this futuristic economy is not as all-encompassing as what we know today. Even 15% of stockpile allocation of a given good on a planet is extremely high, and that’s a yearly allocation. It’s not enough of a lever to move prices one way or another. But don’t fret. It’s possible, and I’ll describe how to manipulate prices of goods on the next DD.

So that’s a decently detailed explanation of how retail works. Now the real question: How can you, as emperor, affect the retail engine on any given planet? Several ways, in fact. Here’s just a few – you can use your imagination for others (that’s why it’s called strategy!)

  • Create shortages within a trade group of a certain good. The higher the price, the more the profit
  • Expand your trade infrastructure to attract more merchants
  • Look for ways to keep your merchants happy! Low taxes, high ADL, a benevolent (high Humanity) viceroy, and a nice planet (terraforming) all help.
  • Attract, shall we say, more noble folk (Pops) to your planet
  • Train your merchants! You will eventually have the ability to build Academies on planets that train Pops, and lower-class Pops will look to use those Academies to become another Pop, and existing Pops will use them to improve their skills
  • Change your retail allocation – but be careful, you don’t want to flood the market with unsold, wasted goods and decrease your stockpile!

A tooltip will give you your monthly allocation of goods and the merchant efficiency so you know how you’re doing there. Remember, if it’s low, you need either a) fewer goods b) more Merchant Pops c) better Merchant Pops d) lower Population.

That’s all for today! LP coming in hot – look for it as well! And next week: How goods work in the economy, what each good does, and how you can manipulate them all like a champ!

Excelsior!

-Steve