[resolved]

Fun fact: I used to make a very small profit from gems a year ago by making boosters for sale.
They started as balanced, but for some unknown reason the market price for sacks has almost doubled since then.

You're missing the chance of getting a foil in the booster in your calculations. I don't think it would make a big difference in the grand scheme (and we still don't know the exact drop-rate of foils from boosters, right?).
Anyway, yeah making gems is a bum deal. I've only turned 1 item into gems due to this (yay badge!).

implying market prices are fixed

I most certainly made money converting my high-gem-value items into gems and selling the Path of Exile booster pack I created. By crafting four or five 7 cent items into gems (100 each), you avoid having to pay the steep Steam tax on those items (7c drops to 5c). So by using up 20-25 cents in cards, you can create a booster pack that (at the time) was selling for at least 36 cents.

Valve hates this man for using this one small trick to boost his steam wallet...

I think that's because when you sell anything on the market, they take money from the buyer. In the gem case instead, is like they're the buyer so, no profit for them = they took a part of your profit (from another point of view, you're buying gems from them, so you have to pay a little fee like when you buy from the market.)

Also, not every object is valued 10 gems, there are some valued more..

I could already tell

Of course, you can be as narrow-eyes and idiotic as in that "article" and buy the cheapest booster available on the market.
But that's also going from the point of buying 1000 gems to craft booster packs, in which case, even with more expensive cards/booster packs, you lose out on money.

On the other hand, if you craft the gems yourself with trash-items that have literally no value on the market and are likely not to be sold, you can gain some steam credit.
Example:
having 1200 gems gave me two booster packs for war of the human tanks - AlteR -> each pack currently costs 0,62€ on the market, the cards average at 0,3€ (which makes a booster about 0,9€, not including foil cards) -> 1000 gems would have gained me 0,5€ on sale, while I've converted 1200 to about 1,70€ for me... Do the math. There's cases in which you can profit. Even two sacks of gems bought for 1,20€ currently could be converted to 2,50€ - buying the aforementioned packs, opening them and selling the cards at the current market situation.

Valve is a massive scheme. Expert at making you buy 'air' for hard money. Hats, gems, cards all worthless intangibles for which they control the supply (hence value). Yes Gaben is pure genius / evil...

I made tons of profit from gems by crafting booster packs and selling cards everyday when you did not have to wait 7 days, so is bad only for ppl who don't know how to use it to make profit.

Gems are outrageous. Truly truly outrageous.

Its all perspective. the math can swing either way. When I take 4-5 crappy 3c backgrounds/emotes and turn them into 400+ gems (the 100 each ones), then get Path Of exile booster pack and sell them for about 30-40c, suddenly gem's aren't such a terrible scheme, are they? :P

There are items that sell on 0,03€ or even $0.03 (less money) that provide 80 or 100 gems even at 0.05 is more than your numbers. Those are more interesting to convert into gems.
Also some packs cost 500 or less gems to craft. So you should take that into consideration.

Although there are very strange situations where gems and even crafting some very concrete packs can be a good option if not the best. But in general I agree. In overall it's a money machine. And that combined with selling the cards obtained from the packs or selling the sacks of gems > Valve profit :)

And while you're entertained (absorbed) in steam, you're not on other platforms or sites, no need to detail the goal of that...
Let's admit it, in Valve there are some geniuses!

EDIT: oh, I realized, him is you :D

It's simple maths .. if you happen to own a game where a booster costs clearly more than a sack of gems you can make a profit. You won't get rich from it, Valve gets its cut too, us usual, but it's not like this article implies, that it's impossible to make profit in general. Those boosters do exist, it's just risky, because of the one week trading stop when buying gems and you have to be careful with false conclusions, as boosters for a particular game might just understocked and overpriced.

IF they are used that way, then yes they are a scam.

However, if you let them build up over a year, and your wishlist features some pretty obscure games - then you can cash in during the Gem auction.

Last year, I picked up Salt for 3600 gems.

An absolute steal.

I also picked up some other lesser known bargains, and titles that rarely went on sale.

Well, when you craft stupid boosters you're losing money, it's obvious. But when you craft stuff like this: http://steamcommunity.com/market/listings/753/345540-Inbetween%20Land%20Booster%20Pack ...
Of course, finding good boosters take time and usually you have small window when you can get profit like that.

So, in general you're right, but someone with too much free time on his hands could get little profit with this whole thing.

Preferred things pre-gems. The gems and the ability to create boosters have by-and-large killed card prices. I was never really one for selling my cards apart from the one time I sold enough to buy DayZ, but the whole thing around buying, selling and trading of cards seemed more interesting to me when the difference between the cheapest and most expensive cards was a lot bigger. Now everything is much more standardised, price-wise.

The thing is, the more expensive the cards were Valve were taking a bigger cut too. They'd have got a boost that first winter sale when what were previously worthless emotes and backgrounds sold in huge amounts but they might miss out long-term themselves through the reduction in price of many cards.

Transforming card into gems is indeed nonsensical and also for most items it isn't worth transforming them. But buying gems from market and create a booster pack with them can give you an advantage and people have already said some examples and there are numerous more examples. In general it is probably for games with more cards to collect since the booster pack gem price is reverse proportional to the numbers of cards in a game.

But you have forgotten a large point. For people like me who want to get badges for games they like they are a great help especially for less known games. Before greedy bastards could use money to control the prices of single games by buying all possible cards and booster packs under a set price and then sell them far higher. They only chance to circumvent this was getting a booster pack drop. With the gem system you can ignore those **** and just create a booster pack for a fixed gem price which is middled over all games containing cards. Also they help clearing out the market with unwanted items you could only gift to Trashbot and co before because you had no chance of selling them. Now you just convert them or you can sell them because there is some minor priceset where others can still benefit from it.

All in all the Gems are a good tool to regulate the market with keeping card prices reasonable and cleaning it of unwanted items. I, for one, am really glad they implemented it and kept it after the auction. It was necessary. The only ones loosing are the greedy ones.

Also since Cards should only be accompanying a game it is good to keep the prices low because I don't like people getting a game only for the cards to make profit. Sometimes people make me sick by stating that they would never get those "trash games" if not for the cards. The mentality of some people is just trash.

Sorry to sound so harsh towards the end but to a certain extent I'm fed with such poor behaviour. It is not my intention to offend anyone.

Thanks for posting about some basic math and common sense!

The only Gem I need is you Lindion45

You can't "purchase" a booster pack with gems that cost nothing to begin with. I think this only applies to people who craft badges? My only interest in getting rid of the useless gems as fast as possible and turning them into a marketable form (cards).

Markets self-regulate. If something is too expensive, people won't buy it as much. Sellers will, in response, lower prices if they want more sales. Same thing in the other direction.

Concluding from the current market price of gems that they are some kind of plot (by whom? Steam?) or bad in general is ridiculous.

Isn't a scheme or rip-off in my situation. I once crafted crappy 0.03-0.05 junk into gems, turned gems into a rare (and rather expensive) booster pack. Unpacked, got more in cards than the booster's value. I made a nice profit that day...

Soon after, the booster pack and the game's cards value dropped considerably.