November 10, 2005 6:20 PM PST

Man pays $100,000 for virtual resort

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Jon Jacobs imagines he can bring in more than $1.6 million a year in revenue--all on a one-time $100,000 investment in something that exists only in the realm of ones and zeroes.

Jacobs, an independent film director, recently invested six figures in a virtual space station in the online game "Project Entropia." He theorizes that the fertile hunting grounds, night clubs and housing on his new property will far more than repay his hefty outlay.

And while some might question the sanity of putting Ferrari money into an investment that would have no value if "Project Entropia" ever folded, Jacobs, who is known in the game as Neverdie, feels he is on safe ground.

After all, he explained, a "Project Entropia" island that famously sold for $26,500 last year has more than paid for itself.

"There were eight other serious bidders (for the space station)," said Jacobs. "The guy that spent $26,500 was trying to spend $100,000 to get the next piece of property (too). Why? He more than anybody knows that that scale of investment" and return was realistic.

"Project Entropia" is an online game that has attracted more than 300,000 players into its "virtual universe with a real cash economy." Its players navigate the recently discovered planet Calypso and work to build a new society. Along the way, they spend time mining resources, hunting monsters and developing and managing real estate.

Jacobs said he plans to make his money by opening up his new resort to lucrative hunting of beasts like kingfishers, vicious bird-like creatures that can easily kill players but that also sometimes drop armor worth $500 in real cash. He also plans to lure hunters in with top-name DJs he thinks he will be able to pay with the proceeds from his hunter visitors.

And because Jacobs saw the quick financial return on the $26,500 island, he believes property in "Project Entropia" may well be a better place to park money than even real-life real estate.

"I actually paid a deposit on a condo in South Beach (Miami)," he said. But "the hurricanes were coming. The first one came, and I got scared, so I pulled out of it. I lost confidence in the American economy and I felt there was more opportunity right now in a virtual economy."

Not only that, he said, but he also refinanced his real-world Miami home and used much of that money to pay for the virtual space station. The rest, he explained, came from $35,000 he'd earned in "Project Entropia" during the last few years from fees he'd charged hunters on a small island he already owns and from the sale of the game's virtual goods.

"Project Entropia" is not the only online game that has seen its members pay thousands of dollars for real estate. "Second Life"--an open-ended virtual world whose players can create anything they can imagine and who can buy and sell land, vehicles, clothing and the like--has also had its share of valuable terra firma.

But no game has seen the kind of money spent as has "Project Entropia," and some have questioned whether the $100,000 purchase was even real.

"The buyer is named Jon Jacobs. This sounds like a fake name--there is even a children's song with this name in it," wrote a commenter named Skeptical in a posting about the sale on the virtual world's blog Terra Nova. "Is it possible that this is a publicity ploy for 'Project Entropia?'"

Jacobs said that he has often appeared at events promoting "Project Entropia" in the United States and has even been granted the title of spokesman for the game at such events. But he insists that he is not an employee of "Project Entropia" publisher MindArk and has never taken a dime from the company.

The game's publisher wasn't available for comment, but in a statement he insisted the sale was legitimate.

"The sale of the space resort, which met a final bid in just three days time, and the dramatic success of the Treasure Island show that the awareness of investing in a virtual universe has really exploded," said Marco Behrmann, director of community relations at MindArk.

7 comments

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Wow, who know?
When this game first came out, I said it wouldn't work. Boy do I have a mouth full of foot.

I see this as becoming a new genre, I wonder how long before we see another game that banks on the same premise. If I can manage to pull some cash out of my extra-dimensional portal to nowhere, I might be interested in the next one to come along. The first one is never the best :P
Posted by PurePacket (28 comments )
Reply Link Flag
I suppose if you gamble online...
With people playing Poker, Blackjack, and any other forms of
gambling in a virtual environment that they can find, then who's
to say that this isn't a natural progression of the trend? And it
sounds like it might even be more fun.

Still, a part of me feels shock and dismay that someone would
seemingly give up on reality in favor of fantasy in such a
financially large and yet vaporous way. After all, the guy would
rather put his money into 1s and 0s than into real property and
items.

I can see a hurricane making you nervous about buying a condo
in it's path, but when the Katrinas, Ritas, and the like are all said
and done, where are you going to keep your real body when the
storm has knocked over your house, or a blizzard has cut off
your power and heat? Good luck keeping warm, dry and safe
inside that virtual space station!

Okay... I've gonna say it after all (and after I told myself that I
wouldn't)! ***??!?!

Eric :)

PS -- Ummm... could this be? A thread without a Mac/PC slap
fight???
Posted by Eric W (30 comments )
Reply Link Flag
Greatest MMORG ever
Is it real? Hell ya its real and John Jackobs (NEVERDIE) is the most outstanding player in game, along with 20 - 40 others that are just the Elite of the Elite. It's real and it growing, which in my eyes proves that it is alive and thriving. Don't believe me? I dare you to try it. >:^)
Posted by moonear (1 comment )
Reply Link Flag
Better returns than the stock market
I guess you need money to make money. I wonder what will happen to this person, either he has too much money and doesn't care if he loses the money or he knows something we don't know. I know that when new games come out hard-core games will play the game for days in a row the first couple of days and then sell the character they created for a couple of thousand dollars

<a class="jive-link-external" href="http://otherthingsnow.blogspot.com/" target="_newWindow">http://otherthingsnow.blogspot.com/</a>
Posted by SqlserverCode (165 comments )
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I'm old fashioned
Personally, I can't understand how people can put a real money value in something that you can't even touch, but then again, I do buy software and I can't touch that. I can touch the cd it came in and read the manual that came in the box, but the software itself is just 1s and 0s.

I'm still flipped out over people that pay money monthly, just to play a game. It's bad enough that you have to shell out the $60 to buy the game, but then you have to pay $9.95 a month just to keep playing it, not to mention the people that cheat in those games, making the entire experience really frustrating.
Posted by thedreaming (573 comments )
Reply Link Flag
When Will The Donald
How long before Donald Trump buys some old railroad yards in Entropia, razes them, and builds the tallest highrise? Seems like a perfect world for him.
Posted by Stating (869 comments )
Reply Link Flag
bump lol

so was the investment worth it or not?
Posted by juanlopez78 (1 comment )
Reply Link Flag
 

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