Guild Wars 2: Gems Are Like Gold Dust

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.

gembox-sms

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.

A sample of some gem store town clothes
A sample of some gem store town clothes

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:

Untitled

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.

A famous picture of German children playing with worthless German banknotes in the 1920s - perhaps the future for the GW2 economy as well
A famous picture of German children playing with worthless German banknotes in the 1920s – perhaps the future for the GW2 economy as well

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

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5 thoughts on “Guild Wars 2: Gems Are Like Gold Dust

  1. knivesmith November 13, 2013 / 2:53 pm

    It’s done on purpose.

    The gold exchanges in the game have remained pretty stable. Things such as Globs of Ectoplams haven’t gone up a crazy amount. With the exception of items related to legendaries, which have been and are still becoming more available, the gold players trade to each other has had only a tiny bit of inflation.

    They’ve been controlling the gold economy. They’ve even put out changes specifically to raise the value of items. They’ve also been letting the gem prices raise purposefully. The goal IS to raise it to a point where a large enough number of oeople prefer to buy the gems over gold. Also, converting from gems to gold RAISES the value of gold, not the other way around. It is a push back force for equilibrium. All that’s left is for the demand for gems from gold to weaken.

    In this case, it doesn’t matter if gold is worthless compared to gems/money because this isn’t a job. The items in question are unnecessary luxury items, as you said. And there’s no way to take money out of the game unless you plan to be a gold seller.

    Finally, why is the cash shop the primary motivator for players? Is it an analogy to the real world where people break their backs for consumer status? I don’t think that applies here…

    • Digital Salad November 13, 2013 / 3:43 pm

      Thanks for the comment!

      I’m sure there is an element of purpose to the gem price, what with it becoming far more enticing for players to buy gem cards with real money rather than exchange gold for gems. I’m not sure they were entirely expecting the extreme rate at which it has risen though, and that was mostly what I was trying to get at with this post. Extreme change in value is damaging overall.

      The gold in game has remained essentially of the same value, yes. I was trying to relate the in game gold to something tangible rather than digital though. As an example, a legendary was worth roughly £1000 back in September 2012 (not that you would buy one outright with gold converted from gem cards of course, this is just an example) whereas it is now £240. This is huge inflation in the value of gold compared to a tangible pegging point. The value of gold to real money is changing wildly, whilst in game gold to items isn’t. That in itself is a greatly interesting phenomenon, but not one which I particularly looked in to.

      I don’t honestly see the demand for gold exchanging into gems to alter in the near future, just that it will become the preserve of elites rather than the core gameplay community as a reward for hard work and enjoying themselves.

      Yes the items in the gem store are unnecessary luxury items, but they are purposefully highly desirable. They are reward items, designed to be obtainable by any player who has played long enough and wants one or two. Its getting to the stage, though, where that is not possible; and that is my core concern in this post.

      The gem store represents one of the rewards for achieving in game. Whilst the lack of reward will not in itself destroy the community, I see that if the core community cannot obtain these items when other players can simply for luck through trading post speculation or else farming all day long, then that will create a broken community – and it is this that will potentially break the game community.

      We are creatures that work on comparison. If I see somebody with hundreds of gems worth of town clothes, which I desire highly due to marketing, but have no way of achieving because I have not been lucky or cannot dedicate 24/7 to grinding; then I will begin to resent those players and the game as a whole.

      • knivesmith November 15, 2013 / 8:24 am

        We’re both making assumptions here, mostly about expectations for the gold by players and ANet, along with where players stand in all of this.

        I think the biggest disconnect for me is the fact that I compare the whole thing about players seeing the gem shop as a reward to Team Fortress 2, a game with a widely considered successful cash shop. And while there are many a cash shop item you can get for free, or using the in game item economy to craft or trade for, I don’t see them as reward items for play. They’re what you pay for with real money every once in a while as a nod back to the developers. When you can get them with in game items, it’s great, but not something you base your entire play out of.

        But if MMO players see that as the point, and one of the main reasons to continually grind out gold instead of just fooling around, then yeah, I can see it becoming an issue in the future. And to me, that’s unfortunate. I interpret that as the game isn’t fun enough in any of its three modes to keep people playing for anything other than more and more rewards, which comes off as weird to me since my previous point of reference was a class based team objective game, much like GW2 in PvP and WvW. I don’t think you can grind for much of the cosmetic items in LoL/DotA2 either (although you do grind for characters in at least one of them, I think).

        It’s late, so I’m not sure where I’m going with this other than I see your point but it’s only a relevant worry if MMO players inherently have a trait that I don’t share or enjoy knowing exists.

  2. Digital Salad November 15, 2013 / 10:39 am

    Thank you for getting back in touch!

    I think we’re definitely at odds because of our different viewpoints. Team Fortress 2 sounds like a similar cash shop to Planetside 2. Its possible to unlock one or two things with the in-game currency, but most are impossible. Although, with PS2 the unlockables can actually be game-changing and a massive upgrade is the main difference there.

    With GW2 there is definitely a focus on achievements, and being able to buy a reward from the cash shop is a part of this. The achievement chests at 5000 achievement points, 10,000 AP and so on give you gems – so the developers definitely feel that Gem Store items are meant to be a reward for dedicated play.

    I think its a potential time bomb for GW2 in its own right, the developer focus on achievement points, adding yet more achievements and adding yet more rewards. It turns it into a achievement grind then, and the idea of having ‘fun’ disappears. There isn’t enough content being created by the developers that is there simply to have fun with. WvW didn’t used to have achievements, but now it does in the relentless drive to boil the entire game down to a tick-box exercise.

    Thank you for getting back in touch, I think our problem was certainly looking at it from different perspectives. The Gem price worries me when it is supposed to be part of the achievement treadmill that the developers are creating. I don’t honestly think that that’s good for gameplay either.

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