Friday, 13 July 2012

[GW2] The Movement of Gems

A couple of days ago a few of us were having a chat about the Gem Store system. I hadn’t quite grasped (and I’m still not sure I do 100%) how it will all work, but thanks to a little twitteducation I learned that whenever you’re buying your gems from the Black Lion Trading Company (hereby referred to as “The House”) you’re buying gems which a player has previously sold to The House at some point. This isn’t a closed system, as players have the ability to buy gems from ArenaNet for real-world money, and gems are then destroyed when they are traded for items in the gem store (though that is up for debate).

Here is the process, as I understand it (the black arrows indicate the movement of gems):
Theoretically, there are only ever a finite number of gems in the in-game system: moving between the players and The House (this finite number would increase/decrease depending upon whether process A or D is stronger). The price of the gems, for both purchase and sale, could either be based upon the theoretical number of gems currently in the hands of the House (ie, the more gems in the coffers, the lower the price for purchase and visa versa) OR it could be based upon the number of gem/gold interactions which have occurred between players and The House within a certain period. The latter of which is more likely, as it would not require The House to keep a long-term track on the number of gems in their “coffers”.

ArenaNet, of course, have an infinite number of gems – otherwise they would run out and we wouldn’t be able to buy from them.

EDIT (18/07/12): Made this edit to take into account Greibach's suggestions, and considering this post is getting linked to in a few places (thanks Tash!) I thought it best to show the other theories.

In the comments below Greibach has suggested a slightly altered model for the Gem system. I guess we won’t have to wait too long to find out how it actually works (and the only real difference is whether the gem prices are determined by the players or by some 3rd party process) – we’ll be able to play with the gem store on Friday evening and confirm one way or the other. See below for a quick mock-up of Greibach’s model:


  1. Actually, I don't think that's quite right. I could be wrong, but it is my understanding that players can buy gems for gold from OTHER PLAYERS, not from the The House. Just as you can sell your sword for whatever price you want, you can place gems up for sale. You are still correct in that you can only buy gems that players have already bought, but the transaction is wholly in the hands of players. So your graph would basically have a second player, and the line between the two players would be Gems <--> Gold.

    As such, the price would be *entirely* determined by what the player market is. That's why I always have said that there will be a huge inflation of the gold-> gems pricing; as people have more and more gold available, the value of gold is lessened, so people will charge more gold to sell their gems. As the economy inflates, so do gem prices.

    1. And, as gem prices inflate, players lay down more real money to buy gems to sell for those large sums of gold, gems stocks increase and gem prices decrease. The market should stabilize when players determine a "fair" Money:Gold ratio. If, over time, players as a whole start to accrue more and more gold and find they have nothing to spend the gold or the gems on, then yes, prices will start to inflate, but all Anet has to do is introduce more gold/gem sinks. Determining whether these future sinks are effective or not is not, well, determinable.

      Also, from what I understand, Anet acts as an intermediary in the gold<->gems market, just as they did in GW1 with dyes and crafting materials. Players buy and sell gems to other players via The House, with The House determining prices based on current stock and recent trading patterns. Whether or not The House could run out of gems like the material and dye traders in GW1 could is unknown at this point as far as I know.

  2. I'm not sure whether Disqus is working at the moment... seems a couple of people have commented without it - apologies if I don't reply to their comments.

  3. Again, I'm pretty sure that they are not an intermediary. You do your trading through the auction house, but you get to set your own price. You can place buying orders, and selling orders, but the power of pricing is in your hands. That is how it works with regular item <--> gold trading market. I could be wrong, and if I am, disregard my argument, but if I am correct, then I think we have to look at it just like how real black market gold buying works.

    As the economy inflates, and gold economies ALWAYS inflate in MMOs (unless you have the potential for permanent destruction like in EVE), then the value of gold goes down. If you can get gold much faster later in the life of the game, then it isn't worth spending as much money (gems) for the same quantity as you got before. As games go on, gold sellers sell more and more gold for your dollar because gold has devalued through time.

    Yes, if you could somehow magically make a perfectly stable gold market, then the prices would be stable. However, due to the fact that money always comes into the game and is rarely destroyed, inflation is a fairly certain constant; the only question is how quickly will the game inflate.



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