Every game has a hard-coded cap due to the way computers store data. A game where data is stored on the user's computer can have large caps that players will never hit, because disk storage space is cheap these days. However, if you start storing data for several million accounts, extra bytes of data get expensive quickly. It looks like item stacks require a byte (2^8), inventory gold requires four (2^27) and stash gold requires four (2^30).
Data storage has gotten much cheaper in the last five years, so creating a tight cap probably made more sense then than it does now. The game was not designed around having ultra-rare items or having much of an economy, which is probably the other reason that the cap is low. Unconditional weapons were removed quickly, it took a while for players to realize that certain q7/q8 items actually provided tangible marginal benefits, and there were no miniatures, tonics or other collectibles aside from weapons and crafting materials.
That said, removing the cap would lead to absolute economic chaos. The entire GW economy has built up around the existing hard caps on storage. Curing that would be worse than the present disease; removing the caps would make a lot of players very, very upset.
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