tbeard1999
SOC-14 1K
I've been playing around with Excel and trying to fix the starship economics in Book 2.
I don’t have GURPS Traveller Far Trader so forgive me if it already solved the problem. I’m a lawyer who does a lot of buying/selling of businesses, so it’s interesting to me in any case.
As I see it, there are two basic problems. The first is that the existing Traveller economics result in many starships (and especially my favorite ship) losing money -- and some losing a *lot* of money. Others make way too much money. The second is that way too much money is available to creative players.
After some tinkering, I’ve made some straightforward modifications to Book 2's systems and created a system that will allow certain starships to make a decent profit and cut down on the Big Money problem as well.
Assumptions are 2 jumps per week for 26 weeks, annual maintenance amortized monthly, buying refined fuel, a full load of middle and low passengers, 4 crew with 1 stateroom each, two crewmen are also gunners, at no additional salary. The two starships concerned are the Book 2 Free Trader and the Supp 7 Far Trader (I assumed it was a standard design and got the 10% discount).
With no modifications, the current system rewards the Free Trader with a monthly cash flow of $84,556. Way too much in my campaign. Even if she transports half the normal number of passengers (but a full cargo hold), she has a cash flow of $16,556. If the crew doubles up, she can carry 2 more middle passengers per trip, adding $32,000 to the ship's cash flow.
Unfortunately, my poor Far Trader is bankrupt, even with a full load, losing $14,088 per month. If the crew doubles up, she can carry 2 more middle passengers per trip, adding $32,000 to the ship's cash flow. Okay, I suppose, but still marginal. At least she might be sold for scrap.
Now, an important variable left off the above analysis is the equity in the starship. While equity is not cash, it *is* valuable and should be considered in any economic profit/loss analysis.
Now, if the starship has a useful life of 40 years, then the starship payments (and the 20% down payment) really are like expenses and cash flow will be a fair indicator of the venture's profit. But I don’t think that folks can buy 40 year old starships for 1 credit, so some value must be there after 40 years.
I think that this residual value would be pretty significant, as much as 50% of new cost for a 40 year old ship. And if the ship has that residual value after it's paid off, then that residual value should be added to the venture's profit.
Let's apply this to a mcr37 Free Trader. When the starship owner makes that last payment, he is a multi-millionare! He owns a ship worth half of mcr37 -- mcr17.5 - and that ship can comfortably generate a profit of around mcr2.5 per year. (Of course, he’s actually a multimillionaire when his starship’s equity equals mcr2.0).
The reason for mentioning this is to point out that that players can be “cash poor”, yet still campaign-threateningly *very* rich.
Imagine the astute player whose Merchant character musters out with a Free Trader with 20 years of payments left. His loan payoff should be about $18.6 million. (This the present value of the right to receive 240 more monthly payments of cr123,333, assuming a 5% interest rate). Yet, the ship is worth $27.75 million (assuming my percentages above). By simply selling the starship, the character can turn a mcr9 profit, and the campaign is wrecked. And how do new characters afford a share in this ship? They’d need to pay the current owner for the equity he has. So if 4 characters approached him to buy an equal share of the ship, each would have to pay him 1/5 of cr9 million! Or borrow the money from him.
Of course, you could increase the rate of depreciation on the starship. But if the ship has any significant value, the player can still cash out and be a millionaire. If the ship was worth 75% after 40 years, our 20 year old ship would still be worth about mcr23.12 with an mcr18.6 payoff. Muster out with mcr5? Where do I sign up?
And the high operational costs cause another problem.
The referee has to make rewards HUGE for adventures that require the ship to abandon its passenger/cargo route. Let’s say that the adventure would take the ship out of service for a month. The costs of operating the whip would be at least cr283,000 in that time period. And while it would be entertaining for the players to get a “huge” quarter million credit payday, only to discover that they’ve actually lost cr33,000, I think the joke would quickly wear thin.
Such huge numbers can make big trouble for unwary referees, as I see it.
But by fiddling around with the numbers, I have worked up a fix, at least for our Free Traders and Far Traders. And only a few changes are needed
1. Quarter the cost of all starships.
2. Change the bank payment to a 20 year, 5% note. Assume *nothing* down if the character received the ship as a mustering out benefit (his employer guaranteed the note, so no downpayment was needed). Each additional mustering out benefit pays 5 years on the note. For every million borrowed, the owner pays $6,600 per month. Ships depreciate at 3% per year for the first 20 years, then 1% per year thereafter. The owner will accumulate a little equity in the ship in the first ten years (less than cr1 million after 10 years), but nothing like in the default system.
3. High, middle, low passages and cargo revenues are *halved* -- a middle passage now costs $4000. Passage and cargo revenues are increased by 50% for Jump 2. So a single Jump-2 middle passage costs cr6000.
4. Require each crewman to occupy a single stateroom – “Union Regulations” require that one stateroom be allocated per crewmember, even if the crewmember doesn’t want a stateroom to himself.
5. Everything else remains the same.
Now, our Free Trader will turn a cr5170 profit each month. If the ship takes a month off, the costs will only amount to about cr78,000. So an adventure with a cr150,000 payoff suddenly becomes a big deal.
When the ship pays off, it will turn a cr66,000 profit each month and the ship will be worth about cr3.7 million. But for most of the life of the ship, there will be little equity in it. This should allow new characters to “buy in” cheaply.
And our Far Trader can make about cr22,146 per month, assuming all Jump-2 trips. If it can only make Jump-1 trips, it loses cr44,800 per month. So to make a decent profit, it must stay with Jump-2 routes if possible. Or at least make 1/3 of the trips Jump-2.
As an aside, this system also makes it possible to determine an economically sound lease rate for starships. For simplicity, assume no downpayment (if the characters look particularly shady, let the finance company charge a “handling fee” of whatever the characters can afford). Lease payments on a 20 year lease would be cr5400 per month per million dollars of value. At the end of the lease, the ship can be turned in or purchased for 40% of original cost. This assumes an annual capital cost (i.e. “interest”) of 5% and depreciation of 3% per year.
A leased ship would give the operators more cash flow, at the cost of limits on operations and maintenance requirements. Excessive wear and tear would also be charged if they turn the ship in.
Comments?
I don’t have GURPS Traveller Far Trader so forgive me if it already solved the problem. I’m a lawyer who does a lot of buying/selling of businesses, so it’s interesting to me in any case.
As I see it, there are two basic problems. The first is that the existing Traveller economics result in many starships (and especially my favorite ship) losing money -- and some losing a *lot* of money. Others make way too much money. The second is that way too much money is available to creative players.
After some tinkering, I’ve made some straightforward modifications to Book 2's systems and created a system that will allow certain starships to make a decent profit and cut down on the Big Money problem as well.
Assumptions are 2 jumps per week for 26 weeks, annual maintenance amortized monthly, buying refined fuel, a full load of middle and low passengers, 4 crew with 1 stateroom each, two crewmen are also gunners, at no additional salary. The two starships concerned are the Book 2 Free Trader and the Supp 7 Far Trader (I assumed it was a standard design and got the 10% discount).
With no modifications, the current system rewards the Free Trader with a monthly cash flow of $84,556. Way too much in my campaign. Even if she transports half the normal number of passengers (but a full cargo hold), she has a cash flow of $16,556. If the crew doubles up, she can carry 2 more middle passengers per trip, adding $32,000 to the ship's cash flow.
Unfortunately, my poor Far Trader is bankrupt, even with a full load, losing $14,088 per month. If the crew doubles up, she can carry 2 more middle passengers per trip, adding $32,000 to the ship's cash flow. Okay, I suppose, but still marginal. At least she might be sold for scrap.
Now, an important variable left off the above analysis is the equity in the starship. While equity is not cash, it *is* valuable and should be considered in any economic profit/loss analysis.
Now, if the starship has a useful life of 40 years, then the starship payments (and the 20% down payment) really are like expenses and cash flow will be a fair indicator of the venture's profit. But I don’t think that folks can buy 40 year old starships for 1 credit, so some value must be there after 40 years.
I think that this residual value would be pretty significant, as much as 50% of new cost for a 40 year old ship. And if the ship has that residual value after it's paid off, then that residual value should be added to the venture's profit.
Let's apply this to a mcr37 Free Trader. When the starship owner makes that last payment, he is a multi-millionare! He owns a ship worth half of mcr37 -- mcr17.5 - and that ship can comfortably generate a profit of around mcr2.5 per year. (Of course, he’s actually a multimillionaire when his starship’s equity equals mcr2.0).
The reason for mentioning this is to point out that that players can be “cash poor”, yet still campaign-threateningly *very* rich.
Imagine the astute player whose Merchant character musters out with a Free Trader with 20 years of payments left. His loan payoff should be about $18.6 million. (This the present value of the right to receive 240 more monthly payments of cr123,333, assuming a 5% interest rate). Yet, the ship is worth $27.75 million (assuming my percentages above). By simply selling the starship, the character can turn a mcr9 profit, and the campaign is wrecked. And how do new characters afford a share in this ship? They’d need to pay the current owner for the equity he has. So if 4 characters approached him to buy an equal share of the ship, each would have to pay him 1/5 of cr9 million! Or borrow the money from him.
Of course, you could increase the rate of depreciation on the starship. But if the ship has any significant value, the player can still cash out and be a millionaire. If the ship was worth 75% after 40 years, our 20 year old ship would still be worth about mcr23.12 with an mcr18.6 payoff. Muster out with mcr5? Where do I sign up?
And the high operational costs cause another problem.
The referee has to make rewards HUGE for adventures that require the ship to abandon its passenger/cargo route. Let’s say that the adventure would take the ship out of service for a month. The costs of operating the whip would be at least cr283,000 in that time period. And while it would be entertaining for the players to get a “huge” quarter million credit payday, only to discover that they’ve actually lost cr33,000, I think the joke would quickly wear thin.
Such huge numbers can make big trouble for unwary referees, as I see it.
But by fiddling around with the numbers, I have worked up a fix, at least for our Free Traders and Far Traders. And only a few changes are needed
1. Quarter the cost of all starships.
2. Change the bank payment to a 20 year, 5% note. Assume *nothing* down if the character received the ship as a mustering out benefit (his employer guaranteed the note, so no downpayment was needed). Each additional mustering out benefit pays 5 years on the note. For every million borrowed, the owner pays $6,600 per month. Ships depreciate at 3% per year for the first 20 years, then 1% per year thereafter. The owner will accumulate a little equity in the ship in the first ten years (less than cr1 million after 10 years), but nothing like in the default system.
3. High, middle, low passages and cargo revenues are *halved* -- a middle passage now costs $4000. Passage and cargo revenues are increased by 50% for Jump 2. So a single Jump-2 middle passage costs cr6000.
4. Require each crewman to occupy a single stateroom – “Union Regulations” require that one stateroom be allocated per crewmember, even if the crewmember doesn’t want a stateroom to himself.
5. Everything else remains the same.
Now, our Free Trader will turn a cr5170 profit each month. If the ship takes a month off, the costs will only amount to about cr78,000. So an adventure with a cr150,000 payoff suddenly becomes a big deal.
When the ship pays off, it will turn a cr66,000 profit each month and the ship will be worth about cr3.7 million. But for most of the life of the ship, there will be little equity in it. This should allow new characters to “buy in” cheaply.
And our Far Trader can make about cr22,146 per month, assuming all Jump-2 trips. If it can only make Jump-1 trips, it loses cr44,800 per month. So to make a decent profit, it must stay with Jump-2 routes if possible. Or at least make 1/3 of the trips Jump-2.
As an aside, this system also makes it possible to determine an economically sound lease rate for starships. For simplicity, assume no downpayment (if the characters look particularly shady, let the finance company charge a “handling fee” of whatever the characters can afford). Lease payments on a 20 year lease would be cr5400 per month per million dollars of value. At the end of the lease, the ship can be turned in or purchased for 40% of original cost. This assumes an annual capital cost (i.e. “interest”) of 5% and depreciation of 3% per year.
A leased ship would give the operators more cash flow, at the cost of limits on operations and maintenance requirements. Excessive wear and tear would also be charged if they turn the ship in.
Comments?
in the sense that we all the same books (CT reprints) and I like to draw on what isn’t in the rules.
