Steam's economy of trading cards and other community items got a little more convoluted a few days ago with the introduction of gems, a virtual currency which can be created by recycling unwanted items. Gems can then be used to create booster packs of cards or to bid on games in the auction that's currently acting as a weird prelude to the usual winter sale. Predictably, the whole thing was initially a disaster — an exploit
caused millions of gems to flood the market and the pre-auction
gem-collecting frenzy was shut down temporarily — but everything was fixed in time for the main event. The bidding began yesterday and runs until December 18th, with rounds ending every 45 minutes.
Previously, Steam trading cards were introduced in the summer of 2013. These cards are acquired primarily by logging playtime in certain games (or by spending money on optional content in free games), and they can also come from booster packs which are randomly distributed to eligible users. Once you've collected a full set of cards for a given game, those cards can then be used to craft a badge to be displayed on your profile. The cards are consumed in the process, but crafting a badge also generates some other items (which include game-themed emoticons and profile backgrounds, and sometimes coupons). If you don't want any of this stuff, trading cards (as well as the emoticons and profile backgrounds that are come from crafting badges) can be sold to other users on the Steam Community Market for money (or, perhaps more accurately, for credit to be used in the market or the Steam store). Sellers can specify prices when they list items for sale, and buyers can place buy orders at the prices they choose. Typical transactions are only a few cents per item, but foil cards and other rare items sometimes cost significantly more.
The introduction of gems, like the market itself, is good for people who just don't care about crafting badges, and would rather get rid of their cards and whatever community items they might have acquired. Now, in addition to selling their unwanted items, Steam users can recycle their unwanted items into gems. In theory, having more options is a great thing. The added confusion, though, might be a bit too much. There's already an established Steam market operating with actual currency, so introducing a secondary currency at this point is a bit weird. It's clear that gems are not meant to be a replacement for cash — you can only use gems to bid on games in this auction and to create booster packs of trading cards — but since gems can be bought and sold in sacks of 1,000 on the Steam market, they definitely count as an alternate currency that needs to be considered in certain scenarios.
Let's say I have a bunch of trading cards and I want cash. I could:
1) sell the cards on the market;
2) recycle the cards for gems and then sell the gems on the market;
3) craft the cards into badges to produce community items and then sell the items on the market; or
4) craft the cards into badges to produce community items, recycle the items for gems, and then sell the gems on the market.
Alternatively, let's say I have a bunch of trading cards and I want gems. I could:
1) recycle the cards for gems;
2) sell the cards on the market and then use the money to buy gems;
3) craft the cards into badges to produce community items and then recycle those items for gems; or
4) craft the cards into badges to produce community items, sell the items on the market, and then use the money to buy gems.
The number of gems awarded for recycling each item varies, and this value in gems is not a function of an item's (user-driven and constantly changing) market price. My trading cards for Hammerwatch are apparently worth 24 gems each, while my McPixel cards are worth only 1 gem each, but Hammerwatch cards certainly don't sell for 24 times more cash on the market than McPixel cards do. One of my foil cards, from Europa Universalis III, can be recycled for 320 gems; another of my foil cards, from Droid Assault, is only worth 80 gems, but on the cash market it's currently worth more than twice as much as the Europa Universalis III foil card.
Since different items have different gem values, and since I don't have a list of them all, I'm not sure whether it's better in general to sell items or to recycle them. For trading cards in particular, however — whether you ultimately want money or gems — I would recommend selling or crafting them, instead of simply recycling them. A typical trading card seems to be worth more in cash than in gems, given the price of a sack of gems right now. The combined market price of all the dozens of cards I'd need to recycle for 1,000 gems exceeds the current market price of a single 1,000-gem sack. Selling the cards would be better than recycling them and selling the gems produced. Similarly, selling the cards and using the cash to buy gems would be better than just recycling the cards.
Many people are, however, selling sacks of gems on the market, so
clearly there are some non-card items which are worth more after recycling. In any case, whether you care about gems or not, it's generally a good idea to craft badges during events like this, since you tend to get a special trading card in addition to the regular badge and other goodies.
As mentioned above, gems can also be used to create booster packs, but this seems particularly silly to me at the current cost of gems. To create a booster pack of three Alan Wake cards, for example, I would need 750 gems, which means I would need to recycle dozens of other cards to afford it. Meanwhile, on the user-driven community market, a three-card booster pack for any given game
costs about as much as three non-foil cards for that same game. If I really wanted an
Alan Wake booster pack, I would be much better off just selling a few
cards and then using that money to buy a booster pack from the market. Recycling dozens of cards, or even crafting full sets of cards and recycling the items that come out, seems guaranteed to be less far efficient. The only reason I'd ever spend 750 gems on an Alan Wake booster pack is to get rid of 750 gems that I can't use for anything else, since gems can only be sold in sacks of 1,000. Some other booster packs, however, cost 1,000 gems or more. There's absolutely no reason to use gems to create these booster packs as long as the market price of a sack of gems remains higher than the market price of a booster pack.
Of course, given that the currently useless Booster Pack Creator is the only way to spend gems outside of the auction, it's safe to say the market price of gems is bound to plummet after the auction ends, and this will change everything. Even if I were an expert on the ever-changing prices and exchange rates in Steam's crazy economic microcosm, it's likely that none of the advice I could provide would be worth anything by the end of the year. So you have a big pile of cards and items and you don't know what to do with them? I'm not sure that any rule of thumb exists. Just be aware of the current market price for a sack of 1,000 gems, and do some math.
So what about the auction itself? Gems are better sold than used for booster packs, at current prices, but are they better sold than used to bid on games? Not necessarily. Again, you should be aware of the current market price of gems before you place a bid. Also be aware of how much a game actually costs on the Steam store, and how much it's likely to cost during the impending sale. Some of the top bids on popular games are way higher than they should be, because some of the people placing bids on these games are out of their stupid minds. Case in point: when I checked the auction last night, the top bid for Counter-Strike: Global Offensive was more than 20,000 gems, an amount which, at the time, could have fetched considerably more than the game's $15.00 retail price if sold on the market. The Forest — a game still in Early Access (i.e., it's not even finished) — also had a top bid around 20,000 gems and a $15.00 store price.
This insanity doesn't apply to every game in the auction, though. More obscure games had top bids below 1,000 gems last night, and most of those games have store prices well above the amount that was needed to buy a sack of 1,000 gems at the time. These low-profile auctions actually seemed pretty easy to win, since there weren't many people bidding. However, for many high-profile games, you can expect at least one ridiculous person bidding a ridiculous amount of gems worth more than the game's price. In such a case, bidding is no longer worth it for anyone else except for other crazy people who place high bids just for the satisfaction of winning an auction.
I'm not really sure what's going on with these high rollers. I think you get a Steam badge for winning an auction, but if that's all they want, they could bid on more obscure games whose auctions are easier to win. Instead, they choose popular games and bid so high that they'd be better off using cash. Could it be the combination of a decent game and a badge that causes them to bid higher than a game's value? Or are they just not paying attention? Could they be blinded by the fact that real money is being substituted for artificial money for the purposes of bidding? I'm not sure.
Of course, I don't mean to imply that all these high bidders are using gems straight from the market. That is, I doubt anyone is actually bidding on a $15.00 game immediately after spending way more than $15.00 on the required gems. Many bidders probably bought gems when they were much cheaper, and recycled items to get a lot of their gems for free. However, my concern is not the amount of actual money these people are spending. It's the amount of money they could be getting instead. If, for whatever reason, you have a pile of gems which you could sell for $25.00, and you'd need all of them to bid successfully on a $15.00 game, shouldn't you just sell the gems and buy the game instead, making $10.00 in the process? (Sure, that $10.00 is just store credit, but it's better than nothing.) Better yet, couldn't you sell your gems and then wait until the sale that starts in a couple of days? That $15.00 game might be 50% off, and then you'll have a $17.50 surplus instead.
I guess I shouldn't be surprised that people are making the less rational decision. In a community of millions of people, there are bound to be at least a few hundred idiots. Honestly — forget gems — the fact that people are even willing to go to the market and spend real money on profile backgrounds and emoticons just to keep them is beyond me, but I guess I'm glad they do so. I've bought and sold some things on the Steam market (and, hilariously, made an occasional profit by buying an item and selling it later), but I didn't put any of my own money in. I started with $0.00 and a pile of cards. Now I have fewer cards and a few dollars. I'm happy with that, and I'm not about to spend those dollars on anything but a game. But maybe I just don't "get it" because I'm not an obsessive Steam badge collector.
Like the market itself, the auction is meaningless to me unless I can screw with the system to get free money. In order to win any of the most noteworthy games in this auction, I'd have to buy so many gems that the items in my inventory, whether sold or crafted or recycled, would never cover the cost. The net loss would be greater than if I just sold my cards on the market and bought the game directly from the Steam store. So it sounds like a bad idea. But, again, maybe I just don't get it.
Did I mention that the item with the highest top bid isn't even a game? It's a special profile background. You can't get it any other way, so I guess that makes it priceless, but it's not even permanent. It's only available until January 6th, after which I assume it disappears from the profiles of those who won it. The high bid, when I checked last night, was nearly 400,000 gems. At the time, these gems could have been sold on the market for well over $400.00 instead, and it would have been nearly $500.00 to actually buy them straight from the market. The high bid has been around the same amount every time I've checked since then, even though a new round starts every 45 minutes, so it's not just one person placing such a high bid. Apparently that's just how much people are willing to pay for a pretty profile background which cannot be traded, cannot be resold on the market, and disappears next month. Yeah, clearly I don't get it. I must be missing something here. Maybe the top bidders are all obscenely wealthy people who just don't care.
Anyway, if you're not obscenely rich and you're participating in the auction and you're trying to win a game, I urge you to check the price of the game on which you're bidding as well as the total amount you'd earn by selling all the gems you're planning to bid. If the latter is greater than the former, it's time to stop bidding.
