Public Corporations Inconsistent In Re: Resources Used

The difference between profitable companies and holes into which one throws money is often the "resources used" payment.

Some public corporations do not pay this penalty. It is my understanding that all corporations, excepting those owned by the State or that have been nationalized, owe this payment.

And yet, two examples:

In Steel, all of the profitable corporations that trade shares do not pay the "Resources Used" payment. All of the unprofitable corporations that trade shares, do.

The same is true of Fruit corporations.

I'm sure I could dig up more if I bothered.

This tells me two things:

1) Public corporations are not being treated as a class, creating perverse incentive structures and success-based-on-a-bug.

And 2) The 'resources used' payment is too high. Unless the intent is to create sectors that only country players will satisfy, these sectors need some kind of cost relief. I would suggest removing the 'resources used' payments entirely except for Natural Resource companies since there, there is an obvious resource being consumed. The costs of those 'resources used' payments will pass through the economy. As it stands, the more steps there are to an end product, the more times it has been taxed by this method.

If you wish to add more cash flow from the Corporation to the State, I suggest raising the default rate of taxation, tying State-owned corporation salaries directly to the gov't employee pay rate, and perhaps making private corporations pay into pension/retirement benefits, and make contributions to the education/health budgets. The result of this would be a different, but tangible, set of benefits to Country Players for allowing private corporations, and a balancing-game between tax rates and CEO players coming in and providing benefits to the population of a country.

Perhaps the majority share holder is also the owner of country so they wont pay.

That only makes sense (albeit not very much, even then) if they own >50% of the shares. Especially if they own 25% or less, and thus it is truly a "public" company, it seems important that those other investors pay what a privately held company would pay.

Country controlled corporations do not pay the contribution.

Only corporations that are not controlled by a country pay.
these are private corporations and some public corporations.

The contribution is very profitable for the country where the corporation resides.
it gives the president a very good reason to allow these corporations.
otherwise, president would refuse them in their countries.

"The contribution is very profitable for the country where the corporation resides.
it gives the president a very good reason to allow these corporations.
otherwise, president would refuse them in their countries."

You say this, as if there is only way way to balance/provide incentives to the CEO/Country relationship.

When that payment is making or breaking a corporation's profit, you're essentially refusing CEOs in those businesses anyway.

It is not "breaking" corporations.

There are many very profitable enterprises around, making high profits for their owners.
also paying the countries, some of these countries are owned by the same player.

Enterprise =/= Corporation. You work on the game so I'm surprised I have to point that out.

I am very able to make a profitable enterprise without ever opening a single corporation.

But consider these two example public corporations in GR:

Akot Steel in United Kingdom II vs. Ropan Steel in Gokuland

Akot steel is a 200/200, product quality 216

Ropan Steel is a 225/225, product quality 247

Akot Steel has a fairly stable history of 200-300M profit per month.

Ropan Steel has not made a profit for the entire viewable history - average losses of ~220M per month.

Akot steel does not pay resource costs, UK2 controls it.

Ropan Steel pays 755M per month in resource costs.

Ropan steel would be making 100-200M/month more than Akot Steel, if that resource payment wasn't there (instead of 500-600M less).

Now look at all five public steel corporations in GR: Three profitable, two not profitable.

The profitable companies have in common that they are 200/200, and controlled by their host nations. The unprofitable companies have in common higher quality, higher efficiency, but also pay resource costs that completely consume the profit margin the market will bear.

In other words, these corporations are ONLY unprofitable because of the resource costs. (This is, thus, the 'make or break,' variable.)

As long as your intention is to ensure that CEO players don't own these corporations, then I guess you're getting what you want - but you're not representing that design intention to the playerbase.

Country resources fee is definitely a huge problem for CEOs, but on the other side, how do we incentivize countries to allow enterprises in if they don't get a chunk of the money? Without country resources used, I would either increase taxes substantially, or just not allow CEO corporations that are not my own. Why would I as a president give up a valuable corporation slot for a mere 30% (default tax) of the revenue, when I can just open my own and get 100%. I would probably jack my taxes up to 70% without country resources used. I would support removing that fee because I can adapt to any change, but I guess either way it doesn't matter to me. I think CEOs need to be choosy about what corporations they build. Anything with high gross income gets hits hard by resources used fees.

Enterprise =/= Corporation. I can make a profitable enterprise while owning zero corporations, easily so while building zero.

If your intention is to lock CEO players out of certain industries (like Steel and Fruit) then just say so up front. And, honestly, simply prohibit them from founding such corporations.

But take the example of Golden Rainbow:

Steel Industry: 5 Public Corporations. 3 Controlled by their host countries (Delray, Oakland, and Akot) - all profitable. 2 controlled by non-country shareholder (Justy, Ropan) - all NOT profitable and for their entire visible history have never been.

What's more, Justy and Ropan have HIGHER efficiency and quality upgrade status so they should be earning even higher profits, not lower - or the Quality/Efficiency system needs a serious looking-at.

These are all public corporations, they should not be treated differently, or at the very least there shouldn't be a 1:1 correlation between state control and profitability.

Fruit Industry: Two public corporations. The one controlled by its host nation is profitable, the one that isn't is not.

The resource payments in all of these cases are larger than the negative profits of the unprofitable corporations and also of the profits of the profitable corporations. There's your causation.

These aren't brand new corporations. They're 225/225s, even maximum market price isn't enough for them to show a profit.

So yeah, state ownership is make or break for a fair number of industries.

Enterprises make large profits.

obviously they do not like paying these fees but the enterprises remain very profitable as they have been from the start.

Andy. I don't know how I can be clearer about this:

I'm not talking about Enterprises. I'm talking about Corporations.

If what you meant to say was, "Enterprise players can just go into other industries and not make these kinds of corporations," then okay fine... say /that/ instead of seeming to not understand the difference between the two. It's extremely frustrating.

My point is that certain types of /_*CORPORATION*_/ cannot be profitable under the current scheme of resource payments. I am 100% in support of host countries profiting from a CEO choosing to develop a corporation in their nation. That's a great design choice to encourage cooperation!

But it has nothing to do with what I'm talking about and I get the impression that you're just brushing me off because you don't like the data I'm presenting for whatever reason. So what's up?

Andy certain product groups that are in major shortage and maximum price are not profitable for CEOs because country resources used is calculated based on gross income. So any product with a high gross income, but also high costs, will end up taking losses even in the most ideal market situations.

My experience is different.
I just made a comment on the percentage of tax in and transfers to the owner.

You are a very experienced player.
I take every complaint seriously, but some inexperienced players are sometimes jumping to conclusions.

Please give me the name of a world, enterprise and a corporation and I will look into it.

Andy. I've given you several.

Check out Vandelay Industries on LU.

Some Corp examples in this CEO:
Vandelay Corn (any of them)
Vandelay Robotics 002
Vandelay Coffee (any of them)
Vandelay Batteries 001
Vandelay Batteries 002

Those are some Corp examples. There are many more. All of them are peak price, optimal settings, max upgrades, and still losing money. I keep them open as a public service to the game haha.

Andy, i think you need to have a report for yourself which shows most profitable corporations of all types. Also add president/ceo split and market price/max price ratio. This way you will be able to see and fix many more corporations which are useless right now.

I checked one of the corn corporations.

raw material cost is 2.3B
out of that, potassium is >1.5B.

This is for 2 reasons:

1. quality 214
2. the price of potassium is very high. Raw materials that are in short supply, become very expensive.
the cost is 0.5 to 1.0 B higher than it should be.

no wonder there is a loss and its only 200 to 300M.

If no one wants to make a fortune on Potassium, the price will stay as high as it is.

I advise you to find players who want to produce potassium, or reduce the quality you purchase, or to close the corn corporations.

Ordering 215 quality is the best for maximizing profits without having to micromanage individual corps. I am not going to go into each of my corn corps and manually order lower quality potassium.

I would love to produce more potassium, but unfortunately I have no more natural resources left. I can't acquire anymore on LU because everyone is below war level 3 and conquering a C3 at my war level costs around 20 trillion in weapons/ammo.

That's okay though. FB is the place to be now.

Andy, John Galt, Lord Mndz,

Speaking as someone that has a Corporation producing Potassium "DN Potassium" in my country of "DanNation" on LU. While also having 2 untapped Potassium deposits. I think I can shed some light on why people aren't building Potassium Corps to reduce the prices.

Firstly, all of my Corps operate using the same settings. 500 Wages, 220 Quality Supplies, Automatic Upgrades, 0% tax rate, Best Price for both buying and selling, Production rate at 130% due to 131 Welfare Index. So it makes it easy for me to compare different Corporations and their relative profits, under controlled conditions.

Using the setting stated above. With Prices at maximum "DN Potassium" makes a profit of roughly $1.2B per month. "DN Services I" makes a profit of $0.99B per month. So, Potassium is more profitable right? No, not in practice...

A services Corporation can operate forever. While a Potassium Mining Corporation has a limited Lifespan of ~100 Real Life Days, (Deposit of 528,000,000 ton divided by monthly production of 893,750ton per month, at 130% Productivity.) Assuming the first 20 days of the Corporations lifespan are used to upgrade the Corp. This gives me 80 Days of profit. Since there are 6 months in a day, and a Potassium Corp produces $200mil more profit per month, than a Services Corp, when fully upgraded, that's 480 months x$200mil = $96B total profit more than the Services Corp. However, since fully upgrading, stocking, and setting up, a Corp can cost over $100B. I'd actually be behind by billions, when the setup costs are taken into account.

That's without even counting the fact that a Potassium Corp requires 257,320 workers, vs a Service Corp 226,100. Tying up 31,220 more workers, to produce less profit after counting construction costs, and requiring me to rebuild it after the resources run out.

TL;DR, Potassium doesn't produce enough profit, to make it worth the trouble of rebuilding the Corporation. I'm better off producing Services, and leaving the Potassium in the ground.


On the second point, of some Corps being structurally unprofitably, while Andy is correct that all Corps can make "some" profit, when selling their goods at max price. Some barely break even, while others make plenty. Case in point...

"DN Services I" makes $0.99B Profit at max price.
"DN Mobile Devices" makes $0.29B Profit at max price.
"DN Chemicals I" makes $0.22B at max price.
"DN Houshold Products" makes $0.75B at max price.

All using exactly the same settings, in the same country, all selling products in shortage, with prices stable at the price ceiling, all producing stable profits each month. But with WILDLY different levels of profitability depending on the Product produced. If I was trying to maximize profit, I'd have to stop producing products like Chemicials, and Mobile Devices, even though they are in shortage, and have reached their price ceiling.

Some products are structurally barely profitable, even under optimal conditions. Meanwhile, others are profit machines. Again, even while using the exactly the same settings, with both products in shortage, consistently at their price ceilings.

TL;DR, The current base price/consumption/production/output levels, make some products hardly worth producing, even when they are in severe long term shortage. While other products, can produce profit easily. Base profitability isn't equally balanced.

Signed President of DanNation on LU

John,
20 trillions is equivalent to 750+ gold coins.

A country can be purchased for 30.

The settings in your corporations are quite extreme.
you could make more profits.

Services corporations can make losses in the future.
Everyone can start them and services did go green recently. you will then make losses.

Natural materials seem to have a brighter future with shortages likely to continue and prices, as we said before, will be allowed to increase higher.

Andy you are completely missing the point. C3 wars becoming impossible over time is unimmersive and game breaking. Having your solution being to buy countries with gold coins is silly. A better solution would be to fix the war game rather than have players use magic coins to magically purchase countries. This is supposed to be a realistic simulation game. How is buying countries with gold coins even remotely realistic.

Andy,

I'm not sure I made it clear why I posted that math. I'm not saying I need more profit, I'm fine and my country is rich. I was giving figures on corporations using the same settings, so that it was easy to compare the profit of Corp types, relative to each other. I don't need more profit overall.

Some products, such as Services, and Household Goods, are structurally more profitable, than others, such as Mobile Devices, and Chemicals. Even when you take price fluctuations out of the picture.

It's ok if this is intended. I just wanted to make sure you understood, because it will distort player choices. Making players less likely to build the Corp types that produce low profits, even when the goods they make, have large shortages.

Thank you for taking the time to communicate and respond, we all really appreciate it

Signed President of DanNation on LU

We have a procedure that computes the potential profitability of corporations in various scenarios.

Our experience is that the procedure can be trusted but there are fluctuations and not all products have the same potential.

Hightech products can be more profitable, products that do not need highly educated workers in large numbers can be a bit less profitable.

all corporations however can be profitable under most conditions.
none are profitable if the product price goes very low.

This happens after a long period of oversupply.

some price ranges differ from one type to another.

natural resources corporations have a wider price range.
Most show a shortage and the price is at the top of the range.

John,

I know your opinion.

You want to be able to attack any country, on any world at any war level.

This will allow you to wipe out whoever you want with little they can do to prevent it.

As to C3s, The reasons to conquer them was strategic, to have a bridge head somewhere to be able to wage war far from your home country.

This possibility is there for nearly everyone.

You are in a very high war level. We have not decided yet, what to do about C3 wars initiated by very high level players.

Any solution will require quite some development work and there are many priorities.

The number of C3 countries you need for strategic reasons is very small. You have won thousands of gold coins as war level awards hence the possibility to purchase a country if you really need it.

The possibility to attack 50 C3 countries, all at war level 3 does not sound like the right thing to do. We will try to find a different solution.

For now, for nearly all players, there is the possibility to conquer 7 or 8 C3 countries, fighting wars that are not very complex. We made the first 7 or 8 wars much easier.