EDIT: In light of the massive traffic this post has suddenly received thanks to GW Reddit I just want to highlight that this post isn’t meant to be an in-depth analysis of the gem/trading post market. I write articles about lots of different gaming topics, so I wanted to keep this topic nice and simple (because its about as complicated as they get when you look deep into it!). I don’t mean to be serious, its purposefully written in the style of the Daily Mail when it comes to its cherry picking. I’m just hoping to reveal a bit more about the topic to anybody that is interested. Please take some time to read some of my other posts, you might find something that you like.
This post is all about quite a specific part of the Guild Wars 2 economy, the gem store. I called it “gems are like gold dust” in reference to their massively rising price over time; although the irony is that you’d need more than just gold dust to buy some gems right now.
Gems are one of the central currencies of Guild Wars 2. The Black Lion Trading Post, as well as hosting the huge volumes of day to day transactions, also hosts the Gem Store.
The Gem Store is full of all sorts of items carefully designed to be highly desirable whilst not giving a significant advantage to the player who buys them. You can find snazzy outfits, funky weapon skins, exotic dyes, rare minis and also infinite gathering tools.
None of these would be any advantage in combat, nobody needs any Gem Store items to steamroller their opponents in world versus world. That’s the point, these items aren’t crucial to gameplay but are highly desirable for the ease that they offer or the aesthetics that they offer.
Why is that balance important? Because the Gem Store is a major revenue stream for ArenaNet. Thousands of pounds, dollars and euros are spent on Gem Store Cards every month, so that players can buy those desirable gem store items such as a broom stick.
Aside from players using real money to buy gems there is also an exchange rate of gold to gems, and a separate one for gems to gold. This acts like a real world currency converting market, with the price of gems in relation to gold fluctuating according to player demand.
This exchange rate has become a source of particular focus recently. Originally, on release in September 2012 100 gems would cost you 20 silver. Exactly a year later in September 2013 100 gems cost 5 gold at its peak, breaking 7 gold for 100 gems only a month later in October 2013.
In fact, since I began writing this post this morning, 12th November 2013, the gem price has gone up over 1 gold per 100 gems to over 8 gold per 100. That’s due to the patch released this evening which has introduced new gem store items, and made previously soul bound gathering tools account bound. Items that do not affect the core combat mechanic of the game suddenly became very desirable, and the price shot up accordingly. Here’s a graph of the gold to gem price this week just to illustrate:
So that means that from Sept 2012-2013 there was a 2500% rise in the price of gems in gold terms. Even in the month between Sept and October 2013 it shot up a further 1000% compare to the original price. Just in one day, November 12th 2013, the price has shot up another 1000% on the original price. All the while the price of gems in real cash terms has remained static.
So gems have become rarer, or perhaps more accurately the value of gold in the Guild Wars 2 in game economy has plummeted. The percentages in he rise of the exchange rate to gems are as close as we can get to inflation figures. We have inflation in the thousands of percentages.
It took post-World War 1 Germany two years to reach a hyperinflation rate of over 1000%, only a year later breaking over 1,000,000,000,000%. With the time-scale of inflation that Guild Wars is experiencing in its economy, fueled by the constant conversion rate of real money into gems which continues to become more attractive, more purchased, and thus fuel the hyperinflation more, we may well end up in a situation where the economy implodes within months.
I don’t mean to sound foreboding with this post. I don’t honestly think that the Guild Wars economy will implode from hyperinflation, but there is certainly much cause for concern when you see the huge rise in the gold to gems conversion rate.
Whilst gems are not crucial to the core economy of Guild Wars 2, they directly link to the value of its in game currency – the gold – which we all rely upon. It might well soon get the stage where Arena Net will have to suspend, or at least regulate, the conversion rate of gold to gems seeing as it looks set to break the 10 gold to 100 gems barrier in the near future.
Otherwise, if they don’t do something about the exchange rate, it will get to the stage where gems are not a reward for playing lots and enjoying yourself and become the preserve of farmers and lucky trading post speculators in game, as well as those willing to spend real life money. If gems are to become inaccessible to the masses of Guild Wars 2 there is a risk of the player base becoming disenfranchised and leaving altogether, a very bleak and entirely avoidable potential future for the game.
Share your stories of gem store purchases in the comments. Have you ever bought anything through it using gold? Have you ever bought a gem card with real money? Do you think gems are good value for money? Do you think the current rise in gem prices is dangerous? Let me know!
Digital Salad – https://lifeasadigitalsalad.wordpress.com