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Banking on a virtual economy

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Banking on a virtual economy

Late last month, Jon Jacobs, an independent filmmaker from Miami, became the first person in the history of online gaming to spend $100,000 on a single virtual item when he bought a space station in the game "Project Entropia."

Jacobs, whose avatar Neverdie is somewhat of a celebrity in the space fantasy game, is so confident of his ability to turn his hefty investment into quick riches that he pulled cash out of his real-world home to help raise the hundred grand.

His certainty is based partly on the experience of David Storey, who earlier this year set the previous record for highest price paid for a virtual item when he plopped down $26,500 for Treasure Island, a private piece of "Project Entropia" land. Storey, Jacobs said, has already made his money back through revenue earned by hunters and miners who pay a tax to use his island.

And though there haven't been many instances of people paying five or six figures for virtual items, the trade in such goods is big business. The value of all virtual items--swords, armor, dwellings, vehicles and the like--is measured in the hundreds of millions of dollars a year. And it is only growing.

So tell me about this space station?

[JJ] Well, the space station is very special because first of all it has 10 hunting grounds. I can probably attract a total of 100 hunters an hour. That could mean a gross turnover of $1,000 to $5,000 an hour (in looted goods) of which I can tax between 1 percent and 10 percent, or $100 to $500 an hour, just from hunting. There's also going to be mining opportunities, and I get 1,000 hotel rooms. On the space station, there is no public storage, which means that if you're a hunter or a miner, you can't hunt for very long and get laden with too many items before you can't move. So you're going to want somewhere to store your stock, so it's going to be worthwhile investing in an apartment. I'm also going to have 200 shops, so hunters and crafters can exhibit their wares. But here's the key, and this is why I did this. Why are people going to come to this space station? One of the features is that I'm going to have audio and visual streaming so I can bring in DJs to stream in live DJ sets. If I'm working with top DJs, they're going to be pumping in fantastic music, and (I can) advertise to the DJs' fan bases that they can see their favorite DJs live in virtual reality.

So how much can you make with this?

[JJ] Let's say there's 20 hours a day of hunting, times as many as 100 hunters at a time. With my 5 percent tax, that's as much as $5,000 a day. That's $35,000 a week, $140,000 a month, or $1.68 million a year. I'm calling that the successful low end.

. . .man 'o man 'o man.

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hm, but some quick brainmelting math shows that the 100 virtual hunters (players) an hour would spend between 10 and 50 bucks each for virtual goods they loot. excuse me, but does it strike anyone else here as insane that people play some MUD and then plop down 10 to 50 bucks for a virtual buck to hang on a virtual wall in a virtual apartment that cost real rent? hello?

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