Residence and the Cost of Energy

Day 3,474, 03:31 Published in Japan Japan by Eikyuu

As the market is gradually calming down after the introduction of the Residence Module, I think it is the right time to give some preliminary economic analysis. We can still expect changes, but some fundamental principles will remain the same and it is best to give them as early as possible because many citizens are driven by novelty alone, and that can lead to bad financial decisions.

If you are impatient, jump to the Conclusions section, where you will find the most essential information. But since becoming a resident is irreversible, I would encourage you not to skip the boring details. I should also mention that, as with all of my articles, what follows is relevant mostly for people who do not use real money, that is, those that want to make a positive balance using purely the virtual economy here.

1. On houses in general.
Let me first reiterate a basic fact about the housing industry, which lies at the bottom of the issue: the production cost increases geometrically (1, 2, 4, 8, 16...) with quality, while the benefits do not. This is an obvious flaw in mechanics, present before the latest update, and essentially meant that you pumped (lots of) money into increasing your energy storage - at least until now.

To be more concrete, let us say that the average salary is around 200cc and that a manufacturer has access to almost full bonuses ~200%. Even with changing pollution and regions, there will always be people with (or close to) perfect bonuses, and they will be able to make the best offers on the market, so I will use 200% throughout. To produce a Q1 house then, 1000 HRM will be needed and that requires 2 instances of work (in the Quarry), plus 2.5 work instances (WI) in the house factory, each giving 40% production value. The cost is then 4.5*200 = 900cc. Take into account the VAT and/or import tax (10% in eJapan) and the market price becomes the familiar 990cc+.

For the other qualities, we have the (almost) geometric increase as follows
Q2: 2000 HRM, 5 WI ⟶ (4+5)*200 = 1800cc,
Q3: 4000 HRM, 10 WI ⟶ (8+10)*200 = 3600cc,
Q4: 8000 HRM, 20 WI ⟶ (16+20)*200 = 7200cc,
Q5: 12000 HRM, 30 WI ⟶ (24+30)*200 = 10800cc.
Which correspond nicely to prices from a few days ago: 1900cc, 3500cc, 7600cc, and 10400cc. Note that I did not include taxes here, but these are rough estimates, and we also have to remember that salaries are not exactly 200cc – due to two-clickers and multiple accounts.

These estimates are enough to notice the main problem for workers who benefit from additional work tickets. Before the Residence update (and afterwards for nomads) each type of house lasted for 1 week and gave the same number of work tickets, i.e., 1 per hour. In other words, having a house active for a full week, allowed one to work 1 more time each day. You could get double the salary, but of course you had to buy the house, and here is where the first problem is: You could increase your income only if your salary times 7 was greater than the cost of the house. 7*200 = 1400cc, so only Q1 houses qualified. This is also why Q1 prices did no climb past 1400cc during the recent hype.

It made no sense to use Q2 once their price passed ~1400cc and you could forget about the higher ones at all. At least if you were looking for income, because there was one more benefit to houses: the increased energy storage. This scales with the quality, so that Q1 through Q5 give: 50, 80, 100, 150, and 200 additional energy, respectively. Is it worth it? In my opinion no, because the additional energy is a buffer that one can use once after a few hours of saving. For Q2 you get 16 more hits (double due to the mechanics of virtual energy) and if you are a Titan with 100k strength using Q7 weapons, the Damage Formula gives ~107k damage/hit, so a meager ~1.7M total. For Q5 that becomes ~4.2M at a weekly cost of ~11kcc (not counting food or weapons).

Before you get the urge to resort to the old "but more damage = more medals" fallacy, keep in mind that although your chances might increase, they are never 100%. Unfortunately, we do not have a reliable statistic of BH medals, so without knowing exactly how much your chances increase, no rigorous conclusion can be drawn. For now then, everyone has to judge for themselves – depending on the time you spend here, your division and tactics, you might be able to make it work.

Finally, the increased storage also has impact for managers with hundreds of companies, as it makes it possible to just click WORK once and spend enough energy in one go. This is a matter of convenience, so up to personal choice really – how much additional money one is willing to spend to save clicking time.

2. Energy regeneration.
But this is not the end of the story as the Residence update finally brought us also the long-awaited house energy regeneration for residents. And you can immediately see that it is a flop because, again, regardless of quality each house gives 2 energy per 6 minutes (according to player reports, because the admin announcement has errors...) or 3360 energy/week. To judge the usefulness, we first have to answer the interesting question of what the price of energy is in the first place.

The only universal reference seems to be the energy bar packs available for gold – it can be bought without real money, and does not rely on food. As usual it makes sense to use the discount prices, and luckily today (Day 3473) we can check that 2000 energy costs 27.3 gold. Let us assume the reference price of gold to be 200cc, because you can still manage that with RH medals. The reference price of energy is then 2.73cc per unit.

How much is that for a whole week with the house rate? One is tempted to take 3360 energy/week and get 3360*2.73 = 9172.8cc which is around the old Q5 price. But remember that some of us have to sleep, study, work etc. When the buffer is full the house regen stops, BUT the new module also extends the durability to a max of 8 days, 9 hours and 36 minutes (120😵 to compensate.

Because it is obvious that Q1 pays for itself, let us look at the Q1+Q2, Q1+Q2+Q3, etc. and check the buffers and costs, assuming 9h of sleep. To err on the safe side I will throw in the permanent +100 storage bonus for which there are discounts from time to time, and look at the regeneration rate (RR) given by the Central Park, houses and base +20 thanks to the new, easier weekly achievements.

Q1–Q2: storage: 600+50+50+80 = 780, RR = 26, fill up time = 780/(26*10) = 3h,
Q1–Q3: storage: 880, RR = 28, fill up time= 3h9m,
Q1–Q4: storage: 1030, RR = 30, fill up time = 3h26m,
Q1–Q5: storage: 1230, RR = 32, fill up time = 3h51m.

You can see then that any break longer than 3~4h reduces effectiveness. So if you sleep for 9h, you lose ~6h of regen and it makes sense to assume only 75% (18/24h) of the durability counts. Remember now that each house gives you only +2, so its cost is only responsible for an increase from, say, +20 to +22. We can thus finally calculate the energy prices for each quality. Assuming the durability is extended to 120% the total energy is 120% * 75% * 3360 = 3024, and since energy bars give real (not virtual) energy you need ~333cc worth of food. The price of houses changed a lot, so let us look at both pre and post update values of energy cost:

Q2: pre: 1900cc, post: 2500cc ⟶ pre: 0.74cc post: 0.94cc per unit,
Q3: pre: 3500cc, post: 4400cc ⟶ pre: 1.27cc post: 1.57cc per unit,
Q4: pre: 7600cc, post: 9800cc ⟶ pre: 2.62cc post: 3.35cc per unit,
Q5: pre: 10400cc, post: 14000cc ⟶ pre: 3.55cc post: 4.74cc per unit.

As you can see, already at the level of Q4 we hit the point of diminishing returns, where it is cheaper to buy energy via bars. An additional average case is when you own Q2 through Q5, in which case the average cost is 2.04 pre and 2.65 post update – just barely below the 2.73. In other words, it would be cheaper to use Q1–Q3 plus energy bars instead of Q4 and/or Q5. (Note that I did not give numbers for Q1 above, because it always makes sense to use it.)

Keep in mind also that I have not included property/residence tax, which in the future will be controlled by mayors, and that the 20% durability bonus only holds for the smallest towns. If everyone wants to settle in them, they will cease to be small. This will be especially visible for regions with good bonuses where managers will idle, and for important cities like capitals, where politicians will want to run for mayor.

Let me also remind you of the fact that once you become a resident somewhere, you can change your residence to another city, but you cannot go back to nomad. The energy regeneration only works when you are located at your "home" and so does the energy storage, although the latter has a 30 minutes time out. So if you need to travel a lot to work as a manager, or to fight, the efficiency will be even lower.

Anyway, the additional energy is more useful than just additional storage, and similarly to the previous section we can sort of estimate the increase in damage, by looking at how much more you can regenerate during one campaign. The standard duration is 12h, during which Q2+Q3 would give 480, so ~5.1M for the weekly cost of 5400 pre or 6900cc post-update. The increment for Q5 alone is just 240, so half of the above for as much as 14kcc/week! Remember that you pay the full price regardless of whether you spend it all on fighting or not and that you can no longer pause houses as a resident.

As for companies, each instance of working as a manager requires 10 energy, but you can only work once per company; taking sleep into account, Q2+Q3 give 720 energy so potentially 72 new companies. This is good news, since 10 energy spent in a Rubber Plantation costs 12.55cc but yields HRM worth 20cc, which is sustainable with moderate taxes. Other combinations, using Q5 food for example, will be even better but you have to remember that companies cost gold too, and a lot of it in the case of Q5 food or Q7 weapon. Also obviously only people who already spend all their daily energy on companies will be interested in those additional 72 companies, in which case they will have to deal with the negative effect of leaving the residence when traveling to their various holdings.

3. Conclusions
As I said in the introduction, the mechanics of this new module has the same old flaw of not scaling properly. When compared to energy bars the Q4 and Q5 are simply too expensive. This could change if their prices go down considerably, but that would also require an equivalent reduction in salaries, which seems unlikely. For now we can probably expect the precises to slowly return to the pre-update levels.

Q1 through Q3 offer a source of energy cheaper than energy bars, however it is hard to judge how much we should be willing to spend on energy in the first place – the bar price is arbitrarily set by the admins. So if until now you have not been spending gold on energy or loosing sleep to maximize dmage/profit, houses above Q2 are probably not for you.

For Nomads: You can still benefit from increased storage all the time, but going above Q1 is not sustainable by additional work tickets. If you spend 24/7 here, you can probably use the storage to secure more medals in the lower divisions, but the jury is still out on the details.

For Residents: You do get the free benefits from the Central Park, and since Q1 is a no-brainer, you have +100 storage and +4 regen right away. However, you cannot revert back to nomad. Although Q2 and Q3 offer a better deal than energy bars, the regen stops working when you move so it is of little help if you frequently travel to fight. Additional storage is active for 30 minutes after moving, but its benefits in battle are limited. It appears that it will be mostly stationary managers with numerous companies who benefit from the additional energy. And the sleepless Titans – as in the nomad case.

The length of the article got out of hand yet again, as I realized, while writing, that there are many more deeper details that could be addressed, compared to what I initially imagined. But I have to stop somewhere, and because the economic situation and people's interests are bound to change a lot in the near future, a follow-up should probably wait until more stable times.