[Irieguy]

I did the exact same analysis you did a few days ago with a friend and came up with numbers in the same neighborhood that you did.

We concluded that we could expect a 200%-300% ROI on our step 1 buy-ins to the level 5 entry.

The problem, as ZeeJustin says, is step 5. I've played one so far and it was the single most competitive poker tournament I have ever played in... including 1-table satellites for WSOP events. I waited for a few hours and selected a step 5 with only 5 players that looked dangerous: Spyhard, Missyrules, N3V3RBluff, Comeonphish, and Sevenfigures. I got lucky and ended up with only Sevenfigures at my table. I got lucky again and watched him bust out in 19th. I got lucky yet again and was the best remaining player at the table and had little trouble making it to the final 10. Then it was amazingly tough. I got lucky still one more time and doubled up with pocket Kings early to get a nice stack down to 9. I nursed it for almost an hour down to 5 players with a small chip lead. The other remaining players were: comeonphish, spyhard, missyrules, and N3V3RBluff.... unlucky. They outplayed me and I got 5th for zero dollars.

Right now I figure that I'm negative EV in step 5, but the gigantic overlay in the first 4 steps that will allow me to play level 5 for $400-500 per, on average, still makes it a worthwhile venture. I disagree with Zee about the time making it not worthwhile. Running the numbers with my own estimates, it's still at least as good as 4-tabling the $55's in terms of hourly rate. But hourly rate is meaningless because the variance is out of this world when you consider the step 5 situation... so you just decide to play because it's +EV and hope you have a favorable variance spike over the short run (you can't play hundreds of step 5's without buying into at least step 4's regularly).

One final note: the step 5's will get easier as more $10 players work their way up and some of the experts decide they can't fade the variance. But the step 3's and 4's are going to get a lot tougher when the fish wise up even a little bit. So, I would recommend playing through level 3 as quickly as possible as many times as possible and stock-piling your level 4 and 5 chances until the level 5's soften up.

Just my $0.02

Irieguy