An Analysis of the Gold-to-Credit Conversion Ratio

SS: This is something really interesting. Some number crunching included, so if you're into this kind of stuff, knock yourself out :)

Author: ForcestormX (US server)

Purpose: The intent of this write-up is, after carefully considering the circumstances and conditions of the process known as 'gold-to-credits conversion' [Hereafter referred to as GCC], to determine the viability of the current rate, and if it is not viable, recommend a course of action.

Abstract: The author compared the ingame value of the 400:1 gold-to-credit conversion rate to other forms of gold economic options, namely premium tanks, and found the GCC option unviable in competition. An analysis of options dismissed any option other than raising the credits/gold conversion rate. A look into choices of ratio revealed an ideal conversion rate change to at least 800:1 or 1000:1. Other effects arising as a result of this change were also identified and addressed.

Section 1: Credits and the Game: The Economy and Credit Use Demand

Credits are the lifeblood of the WoT economy. To the new player, they are fundamentally a non-issue. That is to say, in tiers 1-4, the rate of credit generation is such that for nearly every player, they will have enough credits to afford their next-tier tank upon unlocking it, yet they will almost never have enough credits on hand to afford equipment, such as rammers or toolboxes. Thus low tier players experience no disadvantage in the garage as a result of credits, while still giving more established (and equipped) players the edge on the battlefield.

For the more experienced player there is more of a middle ground. By Tier 5, equipment prices are no longer prohibitive for the average player. However, at this point, having enough credits on hand to afford a tank upon its unlock is rare; usually playing with the express intent of earning credits is required. These periods may not be very long, but they are times where the player must play tanks other than the ones they may wish to play. In addition, having passed into tiers 7 and 8, the risk of losing credits on a lost match is a very real problem that had not previously been encountered. Overall, while still seeing profits, credits are no longer essentially free currency after every battle.

The established player, reaching tiers 9 and 10 for the first time, finds credits to be a key concern. Most battles at these tiers bleed credits. Worse, when tanks are unlocked, the sheer credit cost compared to what is likely in the garage is often staggering. Yet, their problem pales in comparison to that of the player who is attempting to fill out multiple lines, whether after already unlocking a previous tier X or all at once.

Everybody wants to hit tier X, but credits, rather than experience, are the barrier to entry for that tier. In the late stages of the game, credits dominate the player's state of mind. Using only a standard account and standard tanks, where the profit generated is normally quite small, the number of battles required to earn the needed credits can range from hundreds to thousands. It is no wonder, then, that players would choose to use shortcuts to such grinding time -- shortcuts which the Wargaming gold model provides. The author finds this acceptable. Gold shortcuts allow Wargaming to generate income, and give players an element of choice/balance: spend money and shorten time requirements (which is what the majority of gold options achieve) or to patiently grind it out and invest the time needed (which still benefits Wargaming, as it maintains active server population). As a general concept, the credit system is perfectly functional, both for the player and the company. 

Section 2: Options Within the Economy

The ingame and out-game economy, which is to say credit transactions and gold transactions, are both carried out only between one account and the company (WG.net). Put another way, there are no player-to-player market actions; all gold and credits are generated and taken away by the game server. This means that the game economy is entirely centralized for each player; it also means that each player's economy exists in a vacuum, independent of any other player's economic status. Because of this, there are only three states of credit generation available to each player, and they exist in direct competition only with each other, and have no other competition. This is important, because it should be implied therefore that the three methods of credit generation should then be competitive with each other. This shall now be examined.

The first method of credit generation is the gold-independent method - namely, earning credits from battles played in standard tanks. This is the free option, and should be balanced by offering a lower rate of credit generation than gold-related options. This is true, with the added risk of battles returning negative profit, instead of minimal returns. There is little else to say on this method, as it is actually not of interest for this discussion.

The second method of credit generation is the Gold-Credit Conversion (GCC) option. The GCC option immediately bypasses all time requirements by injecting credits directly into the player account, at the current rate of 400 credits per unit gold. This is the quickest way to earn credits.

The third option for credit generation is the so-called 'premium tank,' or gold-purchasable tank which, among other attributes, possesses a higher credit generation rate compared to standard tanks. The premium tank is the compromise option for players: it allows for faster credit earning than standard tanks, but still requires more time than the GCC option.

There is an additional effect upon credit generation: the premium account. It shall be examined further in Section 4.

Section 3: Comparison of Gold-based Credit Generation Methods

It would be assumed, given that GCC and premium tanks are dependent on the same currency, that they would be competitive with each other, within a reasonable margin to account for the time differences one requires over the other. However, is this in fact the case?

One of the immediate problems in balancing between GCC and premium tanks is that one is an immediate one-time use, while the other is retained permanently. That is to say, GCC is gold used once, and thus is spent at a fixed value, but premium tanks if allowed to play on an unlimited time scale eventually will make, at the same rate of conversion, more credits in profit than the equivalent gold value in GCC would generate.


Let us examine this. For this comparison, the following data was pulled from this page: http://www.vbaddict.net/wot.php?do=statistics&tier=0&tanktype=0&nation=0&premium=2&fieldname=creditsn&team=0&battles=100&groupby=0

The data used here was pulled on the 3rd of April 2013; the difference in the numbers today and then should be negligible, but of course that is dependent upon the players. While not official, I think it reasonable as an estimation.

Regardless, for the date in question, selected premium tanks generated a net profit of (on a standard account, which is to say without premium):

Type 59             25667.35 cr/game profit
T34                   21389.50 cr/game profit
Lowe                 20431.81 cr/game profit
IS-6                   16199.55 cr/game profit
T26E4               18291.30 cr/game profit

The Type 59, when on sale, costs 7500 gold; the T34 15000, the Lowe either 7500 or 12500 gold depending on when it was purchased, the IS-6 11200, and the SuperPershing 7500. The selection focuses exclusively on tier 8 premium tanks because they are the most profitable money-making tanks, and so should be the competitive standard. They are also the most expensive premium tanks, it should also be noted.

At the 400 cr/g GCC rate, 7500 gold is equivalent to 3,000,000 credits, 15000 is worth 6,000,000, 12500 gold is worth 5,000,000, and 11200 is worth 4,480,000.

Thus, it can be calculated how many battles are required, at the average rate of profit, for a premium tank to 'break even' with its gold cost. Again, with our selection:

Type 59     116.88 games to break-even
T34           280.51 games
Lowe         146.83/244.72 games (depending on purchase price)
IS-6           276.55 games
SP            164.01 games

It is first off obvious why the Type is easily regarded as the most successful premium of all time, but irregardless of that, it can be quickly gleaned from the above data that comparatively few battles are required, in a relative sense, for the player to recoup the purchase cost difference of a premium tank and realize the equivalent GCC rate. Even the worst case - nearly 300 battles - represents far less battles than are required on average to, for example, elite a tier 8 or 9 tank from stock configuration. And this is only to breakeven: for every battle played past the breakeven point, the earned credit income represents unrealized net gold loss to WG.net as the comparative value of the purchased tank only continues to increase.

As an example, the author’s own personal Type 59 is now at (on 4/17/2013) 937 battles, which is far from the most battles played in a Type 59 by a single account. Assuming only the average rate of standard account profit (25,667.35 cr/game), this tank would have generated over its lifetime 24,050,306.95 credits, or an equivalent 60,125.77 gold value via GCC! It gets worse: as a premium account user and, if it could be said, somewhat skilled player, the author could likely assume I've seen closer to 50k average profit, netting over 937 battles something like 46,850,000 credits or approximately 117,125 gold value via GCC. This is staggering - the tank has increased its value 8 times over as a standard account, or over 15 times over in the case of the author’s own profits! As a result of the author’s Type 59 purchase, WG.net has lost (not gained, lost) approximately 87 to 96 percent of the gold that could have been earned if GCC was the only credit generation option.

Yes, the above example is an extreme case, but it does underline the inherent flaw in the current gold economy: relative to each other, GCC and premium tanks do not exist on the same value tier. A tank that requires only a handful of hundreds of battles to not only recoup but return with interest its cost, and will only continue to appreciate in relative value, massively undercuts the value of immediate one-time generation of credits. Tier 8 premium tanks, since the release of the M6A2E1 on release day and more significantly since the release of the Lowe in 6.4 and the Type 59 in 6.7, transformed the game economy, an effect which has not been acknowledged nor adjusted for in the two years following at the level required to once again make the gold-options competitive with each other. In addition, the higher value of tier 8 premium tanks has created a population spike which has severely detrimental effects on tier 4 light and tier 6 and 7 gameplay.

The first instinct to restore balance between the gold methods would be reduce the economic over-performer: namely to either raise the cost or reduce the earning potential of premium tanks. However, one should examine the situation first. One the one hand, premium tanks in World of Tanks are already of significantly higher cost per unit than other major MMOs that have similar gameplay, namely WarThunder and MechWarrior Online. Premium tanks are, considering external factors, borderline overpriced as-is. The cost cannot be increased. As to reducing the profit of premium vehicles, promises have already been previously extracted from WG.net to the effect that the profitability of of premium tanks cannot be reduced. And even if those promises were not there, how does the rational human honestly think such an event would end? No, premium tanks are fixed already in price and performance.

We return to our WoT economic vacuum. With the returns and value of premium tanks fixed, GCC remains undervalued in comparison. The only remaining option is that the value of the Gold-to-Credit Conversion rate should be accepted as not competitive relative to the rest of the WG.net economy, and so changed. We shall examine this further.

Section 4: Considerations of the Effect of Premium Account Status
The premium account is not a credit generation effect per se, at least in comparison to the three options listed earlier. This is because premium account status acts as a multiplier rather than creating a distinct value per battle. However, it is practical to think that many who would buy a premium tank would also purchase a premium account while using said tank, so it is probably useful to consider the effects of premium on the relative gold value of a tank. Also, as premium status affects premium tank income, but not GCC, then the effect should be taken into account when determining the optimal GCC ratio.

Firstly, the net incomes of tanks must be determined when using a premium account. As premium accounts increase the gross profit by 1.5x, then knowing the net income alone, as in section 3, does the reader no good.

Returning to vbaddict, and pulling numbers from 4/17/2013:

Gross Income, no premium
Type      33155.76 cr/game
T34       30953.24
Lowe     30439.02
IS-6       29989.69
SP        28283.24

Net Income, no premium
Type      23368.14 cr/game
T34       22154.64
Lowe     20035.32
IS-6       15970.43
SP        18293.89

The cost of repairs and ammunition on average will be the difference between gross and net income:

Repairs/Ammo
Type      9787.62 cr/game
T34        8798.6
Lowe     10403.7
IS-6       14019.26
SP         9989.35

This will be the same regardless of account status.

Now, the premium gross income is the gross income x1.5:
Premium Account Gross Income
Type      49733.64 cr/game
T34        46429.86
Lowe     45658.53
IS-6       44984.53
SP        42424.86

And the net profit is the new gross income with the repairs/ammo subtracted:

Premium Account Net Income
Type      39946.02
T34        37631.26
Lowe     35254.83
IS-6       30965.27
SP        32435.51

The result is a near-doubling of net income between the two account statuses.

Recalling Section 3, and that the most battles required for a break-even is 300, it seems reasonable to assume that playing exclusively one premium tank can yield at least 300 battles in a month for an 'average' user. Thus, we add 2500 gold to the cost of each premium tank for calculation of break-even:

Gold costs with 1 month premium

Type      10000 gold => 4000000 cr
T34        17500 gold => 7000000 cr
Lowe     15000 gold => 6000000 cr
IS-6       13700 gold => 5480000 cr
SP        10000 gold => 4000000 cr

Thusly, the breakevens become

Type 59     100.14 battles to break-even
T34           186.02
Lowe         170.19
IS-6           168.95
SP             123.32

The result is that even with the net increase in gold expenditure, the reduction in break-even time is striking. Recall the Type having an earlier breakeven of approximately 116 battles, but the Type having such a low cost is most affected by the premium account cost. A Lowe or T34 sees a dramatic improvement with premium accounts - the T34 required 281 games before premium account for break-even.

The breakeven here is actually worst case: as a distributed benefit, premium account status effects on xp gain and income gain for any other tanks played here cannot even be taken into account, but can be significant.

Conclusion: use of premium accounts even further undervalues GCC when compared to premium tank value.

Section 5: Examination of New Gold-Credit Conversion Rates, and Recommendation of a New Rate Value

There have been times at which the GCC rate was revalued already in the history of WoT: for example, the 2nd Anniversary credit packs in the gift store were calculated not at the standard 400:1 rate, but rather at a 666:1 rate. Unsurprisingly, 666:1 is notably better than 400:1, but is it enough?

Because in Section 3, we determined that the GCC rate is undervalued relative to premium tanks specifically, we will continue to use the comparison between the two to determine the correct rate.

In the case of finding the rate, the best rate is likely determined by having one where the number of battles required for break-even in a tier 8 premium tank passes the point where the number of battles goes from 'significant, yet trivial' to 'actually requiring quite an investment in the game'. A third tier, 'hardcore levels of play' would be even more ideal as a standard, but is probably pushing it too far at this point in time.

We shall continue using the average profits given in Section 3. 

Let us first use the 666:1 ratio utilized in the 2nd Anniversary packs:

@666/1 rate
Type 59      194.61 games to break-even
T34            467.05
Lowe          407.46
IS-6            445.48
SP             273.08

This is a significant increase. The value of unit gold is notably higher, and drives down the speculative value of premium tanks. However, compared to 400:1, it is still only a 60% increase in battles required. Somehow, doubling the number of battles seems more practical:

@800/1 rate
Type 59      233.76 games
T34            561.02
Lowe          293.66/489.44
IS-6            553.10
SP             328.02

Perhaps though,

@1000/1 rate
Type 59      292.20 rate
T34            701.28
Lowe         376.08/611.80
IS-6           691.38
SP            410.03

Adding in a premium account from Section 4, the numbers are depressed again, even at the higher conversion rates. The effect is so significant that even 1000/1 conversion rates do not attain competitive status directly:

@800/1, premium account
Type 59     200.28 battles
T34           372.04
Lowe         340.38
IS-6           337.90
SP            246.64

@1000/1, premium account
Type 59    250.35 battles
T34         465.05
Lowe       425.48
IS-6         422.38
SP          308.30

To reach the same number of battles as a standard account for breakeven, the GCC has to be exactly 1.4379 times higher (or essentially 1.5 times greater) for a premium account than a standard using a Lowe. This could actually be a useful benefit for premium account users: a 1.25 to 1.5x bonus to GCC rates.

Ultimately, it's speculative. The number of battles needed for premium tanks to seem less useful than GCC is subjective. However, it's probably reasonable to claim that unless the value of buying a tier X tank outright is cheaper overall than a premium tank, then premium tanks will continue to reign supreme.

> At the 400:1 rate, the average 6,100,000 cost for a tier X is equal to 15250 gold, or approximately $60 of gold. This is more expensive than even the T34, and is twice the rate for a SP.

> At the 800:1 rate, the average 6,100,000 cost becomes 7625 gold, or about the same price as a SuperPershing or Type 59 if it's for sale. While close, ultimately the premium tank is a better deal.

> At the 1000:1 rate however, the 6,100,000 cost reduces to 6100 gold - this is more likely to be competitive with premium tanks in the longer run, and is also a nice round number (because why not?)

> Even higher rates (1200:1, 1500:1) could also be considered, but at this point it seems too much a change to dwell upon as yet. If premium accounts were not to get a separate bonus, though, it is possible that the additional inflation caused by those accounts would drive the competitive GCC ratio up to such heights. Regardless, such extra-high rates should be used during special events such as the one that spawned the 2nd Anniversary packages.

By changing the GCC value, the GCC is rebalanced to address a market niche which at present is under addressed within the World of Tanks gold system. At this point in time, the only gold commodity that is not a consumable which is priced in the true ‘microtransaction’ range - 100-300 gold up to 500 - is camouflage. There are no real options that permanently affect the player’s garage over the long term (like credits or experience) in this price bracket (as free xp conversion is rarely done in small amounts, especially at the higher tiers). In the larger gold amounts, xp conversion and premium tanks have large effects on a player’s garage. A player that can afford only a few hundred gold per month, however, has essentially nothing they can practically afford to purchase with their gold. The rebalanced GCC rate, on the other hand, gives an optimal option for the low-budget player and as a result opens a market niche that WG’s system currently does not exploit. Thus, it is in WG’s benefit as well to change the GCC rate in the opinion of the author.  

It is the recommendation of the author that the GCC rate be increased to at minimum 800 credits for 1 gold, with a strong request that it be further increased to the 1000:1 rate. It is further recommended that rather than allowing premium account status to force a further rise in GCC rates, instead create a 1.25x to 1.5x bonus rate for GCC conversion carried out by premium account users. It is also recommended that to prevent exploitation, such 1.25x to 1.5x bonus is not available except after premium time of 30+ days is purchased - using such a bonus on a 1-hour premium account is blatant cheating.

Section 6: Acknowledgement of Externalities Resulting from a GCC Change and Resulting Plan of Action

As necessary as reordering the GCC rate to make it competitive again may be, the GCC rate does not exist in a vacuum and would lead to some significant effects on the game if not addressed.

For one, with the credits barrier to entry reduced, demand for top-tier tanks is likely to increase notably, and top tier tank profitability will be slightly less effective at discouraging their use in random battles.

This is a relatively simple problem, as xp is also a barrier to entry for top-tier tanks and can be adjusted independently. Slightly increasing tank-to-tank research costs should damp tier X rushes by newer accounts that otherwise would have climbed the tree that much faster (it is the author's belief that the xp increase does not need to be more than 5%). As for the profitability, this should not be addressed, as the tier X population is arguably underplayed as is.

A more significant problem is the direct pricing of (since 8.1) premium ammunition and (with the upcoming 8.5) premium consumables off the gold-credit conversion rate. In many cases, a 800:1 or greater conversion rate immediately raises the prices for most of these items out of competition with the standard rounds.

The solution for this is to completely disconnect item pricing from the original gold prices and allow all ammunition costs to be rebalanced individually. In addition, gold costs for premium shells should be rebalanced, with cases where the silver cost is not an interval of the conversion rate allowing for rounded-down gold costs to make the gold price more competitive. As the cost of premium shells and consumables was never adjusted to account for their changed role in the economy in the first place, it is the opinion of the author that these costs should be rebalanced anyways.

A cruel yet difference-damping measure is to apply the same 1.25 to 1.5x multiplication to premium consumables and ammo costs for premium users, so as to reduce the economic benefits of using them more than a standard user could afford to. This is not recommended but could level the playing field in some premium-usage heavy battles tiers such as tier V.

It is very likely that other effects would be found to occur as a direct result of the GCC rate change; these should be addressed as they develop, but it is the opinion of the author that on the whole, the benefit of a GCC rate change far outweighs the small problems that it creates.


Section 7: Marketing and Message

As with any major decision and gameplay change with World of Tanks, presentation is key to a favorable reception. The likely most effective method for a GCC change is, unusually for WG, a somewhat aggressive stance on the issue. The cornerstone for creating approval for this particular change is to not give all of the potential discontented groups a single potential problem to unite on, while emphasizing benefits for traditionally less paying groups. Thus, the following points should be emphasized, as early as the initial announcement:

Potential complaint: by changing the GCC rate, WG has reduced the profitability of premium tanks directly/indirectly. This constitutes a nerf to premium tanks.

The official answer should be: no changes were made to the profitability of premium tanks. Indeed, using the above math, premium tanks still over time will be a superior choice over GCC options. This change was enacted to more balance out the competitiveness of the two gold options. In addition, premium tank users benefit as much as any other player from this change when they need credits in a pinch.

Potential complaint: by making everything cheaper, WG.net intends to make more money.

Answer: as there have been no market studies, there are no grounds to assume that there will be any major increase in the volume of sales. This change was executed entirely for the benefit of the players.

Competitiveness is an important word to use in marketing this change. For one, it can be said that decreasing the cost to tier X two years after game launch allows newer accounts to more quickly get to tier X and be competitive with the older crowd in that regard. More importantly, the foundation for the entire change is to make one gold-economy method competitive with the other, so its use is quite justified.

Additionally, WG.net should market the GCC change as being a change for the positive for groups that likely felt oppressed by premium tank usage. Specifically, WG should emphasize that the new GCC rate helps players that could not afford to pay the lump sum required for proper premium tanks by instead making it more profitable to pay in 100-200, 500, or 1000 gold increments for tanks and equipment. In fact, marketing this change as a decision oriented towards freeing the player from the burdensome pressure implying that a premium tank was the only way to succeed in this game would likely be extremely successful. To accompany this, premium tanks can have an emphasis shift in future advertising from moneymaking to crew training benefits.

Summary and conclusion:

After having examined the gold-credit conversion and its value relative to tier 8 premium tanks, it was determined with the evidence presented that among the dedicated credit-generation methods using gold, the current rate of exchange for GCC use renders it uncompetitive to the extreme. Due to the sheer capacity for creating profit alone and without vectoring in the additional benefits given by either generating experience or training crews, per unit gold premium tanks remain a more profitable option compared with GCC even at double the rate currently in use. As different options for gold use should give similar rates of return and premium tanks cannot be reduced down to increase parity between the two, it is therefore advisable to adjust up the rate of return when using GCC. After examining the situation it was seen that at minimum GCC should after rebalancing should return at minimum 800 credits to 1 gold, but does not truly begin to be competitive with tier 8 premiums until reaching 1000:1. Examination of the effects by premium accounts indicated that the multiplicative effect provided by premium account status inflates the competitive requirement for GCC so high that premium accounts should be treated differently in order to better balance the GCC. Externalities of a GCC change such as consumable prices and lowering of the barrier to entry for end-tier content were acknowledged and addressed. Simple responses and presentation strategy were also proposed. In light of the results given by the investigation above and the relative ease of adjusting for externalities, and also considering the potential for both increased revenue for WG.net as well as improving the company’s image in the eyes of the userbase, it is strongly recommended that the information above be acted upon.