The following is purely theory and conjecture based on the time I've spent in game, nothing written is to be taken as pure fact. There is no real reason why I'm writing this all out other than to have it written out and possibly get some opinion on it. I have not read any other theories on the loot system so any similarities with existing theories are purely coincidental.

It is my belief that the loot system - both for mob loot and mining loot and possibly crafting, though I've never really done any serious crafting - works on a system of balance much like a child's seesaw. On one side you have good loot, on the other you have bad (or no) loot. The problem is which one is currently "up" and for how long.

People frequently complain of shooting massive amounts of mobs or dropping hundreds of bombs without getting any loot (this is when the no/bad loot is "up"). Others have the same problem, but to a lesser extent. Why do some people have to go through, say, five no loots, while others go through twenty? The problem is that the seesaw does not have a fixed size. Sometimes it will switch back and forth between good and bad (henceforth bad loot will include no loot) loot very quickly, other times there will be a long dry spell, but know that the loot will eventually always even out (major conjecture, do NOT quote me on this). The problem is finding out how long until you flip sides and having enough funding to get there. This is the reason why you'll frequently find yourself going through a period of bad loot and then suddenly get a 20ped+ loot or even a global/hof. As an example, I was recently out mining for enmatter and went through 35 probes without finding anything. I dropped my 36th and found a medium oil (10ped). I then dropped my 37th probe and found a medium melchi (another 10ped). My last two probes did not find anything. There is my first (tentative) proof that the theory is correct.

The loot system is smarter than you think. It checks the average auction value of each item before putting it in your loot window. Since the loot is meant to be balanced, you will never get an item in your loot that is worth more than you've lost on your hunt. Right now you're wondering about the people that get a hof after a few kills, or the people who loot high end weapons or armour. Quite simply the loot system keeps track of your over-all losses. Every single ped you've lost in hunting since you first started playing. If it feels you've lost enough to justify giving you an uber item, you get it... with one condition.

So what about the people who have lost thousands of ped and never get anything uber in their loot? Well the game was designed to make you lose a certain amount of ped per hour played. This is where the condition comes into effect: if you've logged off after a bad hunt your losses get put into the queue, but your chance of ever regaining them are extremely low relative to your chance if you continued hunting/mining.

It is my belief that this theory holds true. The biggest problem for everyone, however, is having enough funds to keep trying until the loot "flips sides" without having to logout (and possibly without taking too long a break).

My suggestion for anyone finding themself in a dry spell would be to (if they feel they have the funding to continue without going broke) ride it out in the most economical way they can think of. Opalo + amp or finders without amps. Keep going, wait it out, your loot will change.

I think you forgot skill level. Since we don't know the what skills influence what activites and how much this influences your ablity to collect loot. For example mining as you go up in skill you can use better and better equipment for hopefully better returns so how do these skills influence this. What skills; how much?

Also i doubt that it is a balancing act. I have hunted for hours and hours without comming close to breaking even. I have a soc M8 who is a pure hunter and since the last update he has been unable to keep breaking even(and hence isn't on very much).

I suspect it is a series of radom generators arranged on a wave(like a sine wave) and where you are on the wave influences what generator you access.

For example the lower end generators would be for new hunters. It would be rarer for the generator to give large loot and the loots given would be lower. Each animal hunted would have its own generator and sine wave from which to access it. Thining about it it could be one generator and the results could be numeric and the numbers preassigned loot based on monster speices.

If I was truely rich and an uber it would be interesting to bomb a certain area over and over and see what comes up. I wonder if they would still hit loot or that the different points(co-ordinates) access the wave and that your skills generate the variables that determine the generator.

for example co-ordinates 0,1 and 1,1 would be two of the generating numbers where as your skill would be the machine itself. Yes I think that is it.

Crafting is simple of course when seen from this point.

I could probably figure it out with enough data. But hey I would rather play the game. Also they must have some random generation which could make it more difficult to come up with a definate equation.

a bit convoluted in explaination but you get the idea i think.

I do agree that an item's market value is calculated in loot. See ESI.

I also think that the system balances itself over time, and MA has said it costs about 1.50 u.s. an hour to play, but I think there is a randomness to it as well.

Yes, of course. My theory covers the randomness by the length of time before a flip between good and bad periods. This amount of time is random and can last minutes to months.

As for skill, in the case of hunting, the better your skill, the more often you'll hit what you're aiming at and the less shots it will take to bring the beast down. The more mobs you can kill, the more loot you can gather. If you don't manage to kill enough mobs during a good period, you're missing out on loot and, well... tough luck.

But again, it's mere theory and no where near complete. It was also posted past midnight when I was rather tired and not all variables were covered, as you noticed.