The Economy of Gems

Oh boy. So the new post from ANet is out about their microtransaction system. If you haven’t read that yet, go do that first. Anyway, I knew that this was going to be a hot topic when we were preemptively warned on Guru to read the post carefully and “not jump to conclusions”. If you have to warn people to not jump to conclusions, you have to know that what you are about to say is going to cause controversy. Given that clear understanding, I’m not quite sure why they then proceeded to make as many vague statements as they did. Vagueness will always beget debates that can’t really be resolved because by definition, both sides have only vague evidence. Regardless, we do know (at least officially now) more than we knew before about how the microtransaction system will work. It has some obvious pros and cons, and some of that will hinge on the specifics that we sadly do not have.

The Good

Let’s start on a positive note here. I think that this system has a lot of good in it. Gems can be traded on the market to other players for gold (or presumably for goods). Gems cannot be converted to gold via a vendor. This is an important distinction. They do not add gold to the system, merely move it around. This is a very necessary step to control inflation; the gold has to come from somewhere/someone. That alone is very important. We don’t want inflation, especially when it has real money attached to it. Further, gems can only be actually spent on very specific things: character slots, costumes, and “convenience items”. I’ll get into the convenience items in a minute, but the point is, you cannot directly buy equipment with gems. Why is that important? Because it means that someone else (who could have bought that equipment) will be giving you that money and they will be spending the gems on something else. For everyone that uses money to get gems to get gold to get an item, there is another person that already had that gold and could have bought that item that now will not. In the end, the number of people buying in-game items is the same as if you couldn’t trade gems for money.

Now, some people still claim that this means that people will be able to Pay to Win (P2W). I disagree with that assessment, almost completely, on the basis of the definition. Historically, games that were labelled P2W were so because you had to pay money in order to get items that could not be attained without using real money and that were statistically superior to non-RMT items. Thus, you could pay to win. If you look at this system it is not that at all. This is Pay to be Lazy (P2BL). You see, if you don’t have as much time to play the game as someone else and you just buy gems and trade them for gold, then buy the gear you want, you don’t actually have an advantage over someone who didn’t spend money. You have an advantage over someone who might not have that gear, but it’s not because you paid for something they couldn’t get. This is no different than someone who plays a lot and has a metric shit-ton of gold and has all that gear and is compared to someone who didn’t spend money or time to get that gear. Even more, what is the difference between someone who has played a lot and just twinks out all their low level characters with their vast amount of gold and someone who pays some money to trade gems for gold to then equip their low level character? One of them spent more time in game? Does that make them more deserving of fun? Maybe you’ve heard the phrase “Time is Money”? That’s exactly what is going on here.

We have to take a minute and remember the systems in play here. ANet has stated many, many, many times that there is a gear plateau at max level and that max level gear is easy to obtain. Special gear is cosmetic only, just like in GW1. At worst, this means that you can spend money to either get something that is very easy to get through play, or something that is purely cosmetic. I don’t see a problem here. You won’t be able to tell if someone has a twinked out character because they have a lot of Dollars or a lot of Gold. Either way, some people will have more than you, others will not.

I think it bears mentioning though that there is a great flipside here. That RMT for gold goes both ways. You can buy gems with gold. Think about that for a minute. That means you can buy everything from the in-game store for gold. You could buy the box and literally have all of the cash shop items without spending another dime. Ever. How cool is that? For any of you super economy-players, just think about the gains you can have for playing the market. “Free” mules! Finally something to spend your gold on once you have all the items you will ever want. Further, I think there is a subtle but elegant benefit to the fact that you cannot use gems to directly buy items or gold from ANet. Since gems do not have a set value of gold (as determined by ANet), it removes the incentive for ANet to make items grindy to obtain. Let’s take a real example here. In Tribes Ascend, you can unlock classes and weapons with money or with in-game currency. The weapons you can unlock this way are often better than the base weapons. If they made it easy to get these weapons, nobody would ever pay for them with real money, so therefor they have made them take a very long time to unlock just a single one to make it more enticing to buy them with real money. This system drives me crazy. I find it to be very obnoxious. Even though you are not technically buying something that you need to spend money on, you are buying something that takes a super long time to get through normal playing, and it is intentionally designed that way. But you see, since ANet has no control over the gold value of gems, and that wealth comes from players, they have no reason to make something super grindy to get normally because you can’t buy it from them. There are just too many factors to take into account to even make something like that worthwhile for them. Basically, to me, this feels more like if they took GW1 and then opened up the ability for players to buy the costumes and character slots with gold than them allowing you to buy Dhuum’s Scythe with real money. Not that people don’t already do that.

And that brings us to another positive note. This helps combat RMT gold farmers. If you can legitimately obtain gold for money via gem trading, it makes it far less enticing to go to a shady out-of-game trade of gold for money. As such, they will have far less incentive. Now, don’t confuse this with gold farming as a concept. That will in fact be encouraged, but I’ll get to that later. The point is though that it will at least discourage those that farm for profit because the free market will adjust to make their jobs much less profitable.

Finally, I think it is important to remember that you cannot trade gems for Karma. From what I understand, Karma and dungeon tokens (which might also be untradeable) are what will pay for the most prestigious items. If those can’t be traded, there will still be items that can only be earned through hard work. Hurray for all those who don’t want to feel like their work is cheapened!

The Bad

Alright, with that out of the way, I think it’s time to look at this news with some skepticism. One of the things that was briefly mentioned was “convenience items”. I’m really on the fence about certain convenience items. Some of them I don’t care about: storage panes, character slots, golem butlers. Those are things that I will or won’t buy, and won’t be torn up about other people having or not having. The things that I do worry about are so-called “Boosters”. Experience boosts, glory boosts, influence boosts. Some games are built in such a way that playing without these boosts is a serious pain in the ass (PITA). Some of these would include Tribes Ascend, Ragnarok Online, and I believe the paid version of Aion once it goes “freemium”. They are a major PITA to get anything done because they take forever to earn anything unless you are boosted up. Other games have these boosts and most people have no desire to bother with them because the game is both fun and well-paced without them. Games of this variety include League of Legends, Guild Wars 1 (although the boosts were bought with gold, but very few people used them and I never felt the need/desire to), and Team Fortress 2 (not boosts, but just buying items). If you fall on the former side, players feel penalized for not spending money, and I think that is a horrible, horrible business model. If you fall on the latter side, some people will never buy anything because they don’t need them, but many people (like myself) will buy everything else that you offer because we feel you deserve our money. I’ve spent lots of money in all three of LoL, GW, and TF2, but never because I felt I needed something. In those other games, I felt disgusted by their shops and spent little or no money on them, and didn’t play them for long. Instead of a long grind making me want to play more, it made me want to play less, and ultimately I spend far less time in games with long “progression” than in games that are faster and more fun.

To be fair, I did list GW1 in the games that had some forms of boosts that I never cared about. I really do hope/trust that ANet won’t make their game one of those games I hated. They have said it over and over again, and I believe them. I just think it is always healthy to approach things with some semblance of skepticism until you see the implementation. Anyway, that’s really one of the issues I’m most apprehensive about.

The Ugly

The other issue I mentioned was that while it would combat RMT gold sellers, I do believe it may encourage gold farming/grinding. Here’s my reasoning- one of the benefits of gems is that you can buy all the cash shop items with gold. That means, by extension, that there is real money to be saved by farming lots of gold. Now, I feel that gems will have a very high gold value. Why? Because people don’t want to spend $10 for a trivial amount of gold that could be earned in say 30 minutes or even an hour. If the value of gems is a high amount of gold, that means that by extension people will be incentivized to farm lots of gold to get those items from the shop for “free”. As we all know, the economy of an MMO does not work like a real economy. Money is constantly generated by killing mobs and only destroyed by merchants/gold sinks. If there is an incentive to farm gold because it saves real money, then it will make inflation occur at a much faster rate in my opinion, and that is an ugly truth. MMO inflation can be pretty bad for games, and when you can buy that gold for real money, that also incentivizes players who are poor in gold to buy the inflated currency with gems… it’s kind of circular.

Will this come to pass? Perhaps, perhaps not. Maybe most people will just plop out their credit card instead of gold farm for character slots. Eventually, the interactions between gems and gold will be affected by inflation. Whether that turns out to be horrible or merely a non-issue is impossible to predict at this point.

The Unknown

What is in the shop? We know/can guess at lots of things. I think it is safe to say that Character Slots, Costumes, Golem Butlers, Glory and Influence Boosters, and perhaps Dyes and Storage Tabs are all very likely or guaranteed things. Experience Boosters are possible as well. If that’s it, I’m mostly ok with it, though with tempered caution about the boosters. Again, how big of boosts are we talking about here? What is the normal non-boosted rate? What is the balance of items that can only be bought with Karma vs items that can be bought with gold? How much play does it take to get a rare item, and what will the exchange rate for gems look like? There are a lot of unknowns here, but in my opinion they are mostly small and things I trust ANet to get right. Others can and will disagree. Overall, I’m cautiously optimistic.

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4 Responses to The Economy of Gems

  1. Kaboobie says:

    I feel like the “ugly” potential of this system far outweighs any perceived benefits and arenanet needs to find a way to counter this or make a change proactively.

  2. Hunter says:

    GW1 is an example of good xp boosts if you ask me, anybody could plonk down a small amount of gold and grab one. And we’ve seen that WvW actually gives server bonuses to xp, so I think we can count on it. Arenanet is not the type of company to penalize anyone for not having xp boosts, so I think we’re going to be fine on that front.

    I’m also confident there will be plenty of things in the shop we’re not expecting, but nothing that would motivate people to grind in some insane way.

  3. Ashuan Necrosis says:

    the ugly ain’t that hard to fight against, if Anet puts a limit for gems price, let’s say about as much as a relaxed (aka casual) player can make in a day (let’s take a day as 2h, i’m guessing items will cost several gems) in an average/high level (50-70) would be a nice limit, not too low, not too high and would keep economy balanced, and ofc make store items untradable, the previous MMO i played (jade dynasty) became really impossible (was a pay to win with a banker function) to do anything without actualy paying due to items outside the so said banker (gem exchange for gw2) being sold over 2x the limited per gem price in the banker, but the price limited by the game wasn’t broken and wouldn’t be a too harsh (most necessary items would cost 1-2 jaden, the currency there) as would take about 4-5days for a high level player to get or 2 weeks for a low level one (if were the 1 jaden price) so if there is some sort of limit implemented by A-net i believe this crazy inflaction won’t go out of hand, if there isn’t on the other hand….

  4. ArcherAvatar says:

    I’ve been waiting for this shoe to drop since learning vague details about the financial model used by ArenaNet some years ago.

    To be clear; they HAD to make this announcement prior to April 10th or leave themselves open to folks crying foul after they have already forked over their money for the pre-purchase option that will allow them into all subsequent beta weekend events, as well as the three day head-start. The timing of this information is from necessity… they would likely have wanted to hold off longer, and possibly included specific details about exactly “what” can be purchased in the cash shop to avoid at least some of the hysteria due to assumptions being made (perhaps erroneously…)

    Re: Hysteria
    It’s understandable for folks to feel strongly about this topic. Many, many players have had resoundlingly bad experiences with MTs (micro-transactions) in other games, and let’s be honest here, the VAST majority of MTs are basically very poorly handled by the companies attempting to employ them as a means of financially supporting their product.

    Far more MT-based financial models either start off as “abusive” towards their players (or evolve to end up that way) than not. The “money-grab” feeling associated with them is exacerbated considerably by game design practices which “encourage” (*cough* force *cough*) players to make regular purchases in the cash shop to “enable” a more normal / fluid feeling of play.

    I see NO evidence this is the case with Guild Wars 2.

    In fact, quite the contrary… the game is designed around a philosophy of “player skill” exerting more influence than “character power.” You cannot buy player skill. No matter what, that is still earned through time invested, and practice.

    There are no “gear grinds” or similar flawed design systems which are open to abuse from the MTs.

    Numerous folks (at guru forums) have suggested that the proposed system is open to abuse with respect to how it interacts with the “influence” mechanic associated with guilds. However, once again, there is absolutely no logical evidence supporting those claims. At the very worst, we need to wait until we see actual numbers on the rate at which influence is normally earned, and how often it can be “purchased” with gold from NPCs. If, as has been strongly suggested, such purchases are only possible to make on a weekly basis, then there is already a sufficient “governor” on that engine to prevent it from over-revving.

    Conclusion:
    I’ve been very outspoken about my dislike of MTs in general, and my wariness about this financial model being utilized in GW2. If anyone was going to “freak out” about this announcement you would think I would be at the front of that pitchfork/torch weilding mob, but I see nothing in the post by Mike O’Brien to suggest that is the correct response. There are still further details needed about the cash shop, and I withhold the right to pick up my pitchfork when and if that becomes necessary, but at this point, I see nothing to warrant it.

    As currently outlined by Mr O’Brien, the system actually looks like it will benefit both casual and hardcore (with respect to playing time) players which is a pretty neat trick all on it’s own.

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