Virtual space resort sold for $100k

Written by Geoff Richards

October 25, 2005 | 16:14

Tags: #digital-economy #investment #project-entropia #space-station

The sale and trade of virtual items in MMO games is big business. The MMORPG Project Entropia hit the headlines last Christmas when an Australian gamer known only as 'Deathifier' paid US$26,500 (£13,700) for an island in the game. He is hoping to turn a profit by selling subdivisions of land and by taxing players who mine or hunt on the island.

If you thought that was bold / crazy / stupid (delete where applicable), make sure you're sitting down for this one. Project Entropia player Jon Jacobs, aka Neverdie, has forked out a staggering US$100,000 (£56,200) to buy a virtual space resort at auction. The purchase includes a mall shopping booth and market stall owner deeds, a land management system, a billboard marketing system, and space station naming rights.

Project Entropia is a little different from other online games. The game itself is free to download and there are no monthly subscription fees. The 300,000 registered users exchange real money for Project Entropia Dollars, or PEDs, and participate in a virtual economy. Ten PEDs are the equivalent to one US dollar and typical items sold include Repedge battle axes at 4.55 PEDs (45 cents) and Angelic Flakes at 1.48 PEDs (15 cents).

Players can contruct buildings, create businesses and make investments to build their in-game wealth, which they can then cash out back into hard currency. Trade is brisk: the projected GNP for the Project Entropia universe in 2005 is 1.5 billion PED, or some US$150 million. If that figure seems incredible, it represents US$500 a year per player.

This monster purchase is undoubtedly an investment; while individual characters for most MMO games regularly change hands for several hundred or even thousands of pounds, the purchasers are usually after a shortcut to playing with a Level 71 Mage. However, large investments such as this space station purchase are uncharted territory - nobody has attempted to make such large amounts of money from a virtual world before, aside, of course, from the developers.

"The path to becoming truly wealthy is to buy only things that appreciate in value, and avoid those that depreciate or lose value" is a common theme in most Get Rich Quick self-help books, and Deathifier is gambling that his virtual real estate will grow in value. A car-nut might take his $100 grand and blow it on a fully loaded Mercedes CLS 500 only to find it shedding a third of it's value in the first three years of ownership. Invested in stocks, bonds or a bank account, he might see an 8-12% return, netting him maybe $10k grand a year in interest - safe, but meagre compensation.

One would hope he has a clear business plan for recouping his investment in the game, and is no doubt praying the servers keep running long enough for him to do so. In the short term, the winner is the seller, who's identity has not been reported. If you see someone walking down the High Street, laughing all the way to the bank, that's probably them.

Do you think people are going too far, asks forum regular MrWillyWonka? A man in China was convicted of murder after killing a friend who had borrowed a sword in Legends of Mir II and then sold it on eBay for US$900. Would you spend $100K on just a virtual city, when you probably buy every game and every console in the world for this price. Speculate and accumulate in our News Discussion forum.
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