ISK vs. ISK

I suggested in a science fiction piece I published here recently that the GDP of Eve Online was going to surpass Iceland's by 2012. The unique financial position Iceland finds itself in at the moment has encouraged me to look into this in a little more detail.

The last figures I can find for the GDP equivalent for Eve Online are the Gross User Product for June 2007, which was 50 Trillion ISK, with a projected growth of 5% to 25% per month. At a lower bound of 5% growth per month, this gives us an estimated GUP for October 2008 of 110 Trillion ISK. It is considerably harder to find a good guide to the Eve Online ISK to USD exchange rate: an Ebay answers article suggests an exchange rate of about 11 million to the USD.

The main ambiguity in the EVE GUP figures is the definition of the term trillion. I'm going to assume that Eve is reporting on a short scale trillion (10 to the power of 12), which implies Eve Online has a GDP of approximately USD $10 million.

The real world Iceland had a GDP of USD $19,510 million in 2007. That suggests that Eve Online is currently equivalent to a handy 0.5% of Iceland's 2007 GDP figures, and growing at a rate that will surpass Iceland's GDP by 2019 (It may have already surpassed Iceland's population).

I was surprised to find that, despite having it's own economist, that there is not more current figures available. So is it possible to find other figures that confirm that 5% growth per month estimate?

It turns out there is. This article provides an estimated GDP per capita of 100 million ISK as of June 2006 and this press release indicates CCP are confident of hitting 250,000 subscribers by Q2 2008. While from different time periods, we can do a back of the envelope calculation - noting that the per capita GDP growth has only been going upwards in the earlier chart - and estimate the Eve Online GDP as of March 2008 as of 25 Trillion ISK. That of course grossly underestimates the figure given in June 2007 - suggesting that the per capita ISK figure has grown by at least double in 12 months (more because there are were less in game players at this time). A more recent press release puts the figure in November 2007 as 450 million ISK per person - a fourfold growth, or at least 100 Trillion ISK GDP in November 2007.

What this suggests is the 110 Trillion ISK figure I gave earlier is an underestimate, and a higher total should be used. Note that every time we use a higher figure, Eve Online's GDP increases proportionate to Iceland and the rate of growth increases reducing the number of years required to reach Iceland's 2007 GDP figures reduces. And with the economic problems Iceland currently has, it is unlikely to expand the 2007 GDP figure for a while. In fact, I'd suggest as a sound bite, Eve Online has undoubtedly exceeded 1% of Iceland's GDP. The fact you haven't heard about it, is because the larger Eve Online gets, the more exposed it is as a non-national entity to manipulation by outsiders.

The fly in the oinment of course, is the estimate of Eve Online ISK per US dollar. I don't have solid figures for this, and the currency itself is not freely tradeable. But then again, neither is the Icelandic ISK. Luckily the figure I used is a black market price, which is far likelier to represent the true conversion rate than a fixed official exchange rate.

So what is a truer figure? Sans better Google searching, or some official figures, I'm going to wildly speculate for a second. Let's assume a subscriber base of 300,000 at this point in time, and a per capita figure which doubles every six months. Extropolating from the 100 trillion November 2007 estimate gives us an estimate of 480 million ISK November this year, or USD $43 million: 2% of Iceland's GDP, quadrupling per annum. That means without a population cap, Eve Online will exceed Iceland's 2007 GDP in approximately three years. I may have underestimated a little in my science fiction think piece.

The other argument of course, is that Eve Online doesn't produce any commodities and therefore a GDP figure is meaningless. If you've read Prince Charming you'll know my counter argument: Eve Online produces CPU time. And that should be enough to change the world.