Essence gems are small stones which carry a certain amount of magical power. Once players have progressed far enough through Chapter 1, they will gain the ability to use essence gems to achieve certain effects, such as boosting character stats. (Incomplete) {Spoiler} When you are in the Spirit Cave, Master Li notes that the Player character's people, were "adept at using Essence Gems", and that their full power can be brought out by the Dragon Amulet. {End of Spoiler}