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Entrepreneur Makes Millions Selling Virtual Land 142

Posted by Soulskill
from the expensive-patterns-of-electrons dept.
kkleiner writes "How much would you pay for a piece of imaginary real estate? Anshe Chung has made millions renting it. Today, Anshe Chung Studios has 80+ employees managing thousands of rental properties, helping design new 3D virtual chat rooms, and making tons of money on virtual to real currency exchanges. Anshe was the first person whose virtual property exceeded a real world value of 1 million dollars, and Anshe Chung Studios is perhaps the single largest third party developer of virtual property ever."
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Entrepreneur Makes Millions Selling Virtual Land

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  • by kotku (249450) on Thursday August 25, 2011 @01:19AM (#37202054) Journal

    Do two scams cancel each other out?

    • Buy something worthless with something of equal value? I'd say yes it does.

      The joke's on the person selling the land; they thought they were scamming someone out of something of value.

      Dollars, BitCoins, what's the difference? :P

      • by mwvdlee (775178)

        A dollar has two sides on which one can gamble real money. Do bitcoins even have sides?

      • by tepples (727027)

        Dollars, BitCoins, what's the difference?

        The United States Government takes USD as a bribe not to put you in jail for tax evasion. It doesn't take BTC.

      • by Neoncow (802085)

        One is entertainment/art and the other is a cryptographically restricted medium of exchange. They're only as worthless as you can devalue other people's definition of worth.

  • by jimmydevice (699057) on Thursday August 25, 2011 @01:20AM (#37202058)
    A new paradiem for the declining economy.
    When I was younger, we called it castles in the sky.
  • by toygeek (473120) on Thursday August 25, 2011 @01:22AM (#37202072) Homepage Journal

    Hey look, these are your VERY OWN 1's and 0's! We are taking painstaking measures to make sure that absolutely NOBODY ELSE has this same arrangement of 1's and 0's. Sure, we could randomly generate them and then check them by md5 sum against all other files in our database, but NO, we design them JUST FOR YOU!

    Hurry now and we'll throw in not just one set of 1's and 0's, but we'll sell it at HALF PRICE! That's right call now and only pay $1999.99, that's 50% off the normal price of 3999.98!

    But wait, there's MORE.

    Call within the next TEN MINUTES and we'll give you not just one set of 1's and 0's, but TWO sets for the same price! That's only 999.995 EACH! Yes, that's 75% off each set of 1's and 0's!

    They are virtually PRICELESS!

    • by Serious Callers Only (1022605) on Thursday August 25, 2011 @02:49AM (#37202538)

      Hey look, these are your VERY OWN 1's and 0's! We are taking painstaking measures to make sure that absolutely NOBODY ELSE has this same arrangement of 1's and 0's. Sure, we could randomly generate them and then check them by md5 sum against all other files in our database, but NO, we design them JUST FOR YOU!

      A great painting is simply an arrangement of inexpensive paint on canvas, a great novel is simply familiar words rearranged on a page, great music is simply the same notes rearranged, and great software is simply 1s and 0s (NB *never* a random collection of bits). Yet somehow all these things are valued above mediocre paintings, novels and software, and people are willing to pay for certain arrangements of 1s and 0s, not because they are stupid, and all 1s and 0s are the same value, but because particular arrangements of information are valuable.

      As we move the boundaries of our world to encompass more of the virtual than the real, information will become increasingly valuable, not less valuable. Digital information is also easier to copy than real-life encodings of information, which forms an interesting counterpoint, but that doesn't mean that 1s and 0s are inherently value-less or that any arrangement of them is the same as any other. Quite the reverse - it is becoming more and more clear that information (or order if you prefer) in and of itself has value, entirely independent of the physical world.

      • So you mean that if I got a thousand monkeys watching the output of /dev/random, after a few hundred years they'd go "Woah! The Linux 2.6 kernel source code!"?

      • It's a bit more complicated than that.

        What people are actually paying for when selling virtual information like photographs and novels are the intellectual property rights pertaining to the work. It is unclear what intellectual property rights a third party developer retains. In many cases the developer of the virtual world will retain the intellectual property right (depending on the licensing agreements in force in the game) and the third party developer is merely selling a "presence" in the game. Withou

        • And as to your analogies, in most cases people do pay tens of millions of dollars for paintings for the original, physical copy. Reproductions, even masterfully done ones, are only ever worth a fraction of the piece.

          You're focussing on the wrong part of the analogy. I didn't say originals of paintings were worth less than digital copies, I said the information encoded was what transformed relatively worthless materials into something valuable (of variable value depending on the artist, market, etc, act). Just as the information in a given set of bits could make it worth more than another set of bits (as when you buy software online, you are buying information, or, if you prefer a license to use information (if you happ

      • by Solandri (704621)

        A great painting is simply an arrangement of inexpensive paint on canvas, a great novel is simply familiar words rearranged on a page, great music is simply the same notes rearranged, and great software is simply 1s and 0s (NB *never* a random collection of bits). Yet somehow all these things are valued above mediocre paintings, novels and software, and people are willing to pay for certain arrangements of 1s and 0s, not because they are stupid, and all 1s and 0s are the same value, but because particular a

        • The difference is that a great painting, the print issue of a great novel, and the original stamping of a great music album cannot be exactly duplicated. An arrangement of 1s and 0s can be exactly duplicated such that the copy is indistinguishable from the original. That doesn't mean it doesn't have value, but that does mean selling it in such a way that it is "the only copy in existence" is downright silly. If it's so great, you'll make a lot more money copying it and selling it cheaply until everyone has one.

          Yes of course there are differences, and some physical objects are hard to duplicate but that doesn't make them inherently more valuable, except as trophies.

          These originals are already artefacts of another age in the case of novels and music albums - new productions are increasingly only released as information, not as physical artefacts. I was asserting that digital information (order) has value; something converted to digital information does not immediately become as valueless as random bits, as the OP a

    • by macraig (621737)

      I have no problem at all with buying a pair of cheap knockoff brand shoes. If they have the same arrangement of molecules and do the same job, what do I care what name is on the label? So if some other guy offers me the same arrangement of 1's and 0's at a lower price, what do I care whose name is on the office door... errr, cubicle?

    • by AmiMoJo (196126) <{ten.3dlrow} {ta} {ojom}> on Thursday August 25, 2011 @03:19AM (#37202684) Homepage

      You might as well argue that a painting is just some oil on a canvas, a digital photograph is a string of 1s and 0s. Creative works have value because they require effort to create.

      • Then why do most artistic works increase in value after the artists death? This is typically when the effort they are putting into creating the work is declining rapidly.

        It is commonly accepted in the physical world that the original is worth more than duplicates, even among people who can't actually tell them apart. However in the digital world it is not just that these duplicates can be created so cheaply, nor that they are totally indistinguishable, it is that the isn't even an original.

        Value only exists

      • I think that creative workd have value because they make us feel, think, and understand.

    • by Dunbal (464142) *
      Who cares what it is, as long as someone is willing to pay for it? What's the difference between some 1's and 0's, and say the design on a Luis Vuitton handbag? People are (still) allowed to do what they want with their money and they will. Just sitting there and complaining about how stupid it is will not stop them. But if you were really smart you would be finding out what the next "pattern of 1's and 0's" is, and making money off of their "ignorance".
    • by geekmux (1040042)

      Hey look, these are your very own pieces of cardstock. Sure, others may have ones that look like yours, but these are YOURS. You can collect them all, each with their own likeness of your favorite player!

      But wait, there's more!

      Buy ten pieces of cardstock, and we'll throw in a piece of gum, for FREE!

      Yes, in case you hadn't caught on yet, I am referring to baseball cards. Point is people have been collecting objects that may seem rather pointless to the masses for decades now. The fact that the medium has

    • by biodata (1981610)
      It sounds as though you arguing that the whole software, music and film industries are really just a giant scam. Oh wait...
    • by Dabido (802599)

      ... not just one set of 1's and 0's, but TWO sets for the same price!

      It was just a dream, Bender. There's no such thing as two.

  • I'm conflicted (Score:4, Interesting)

    by 93 Escort Wagon (326346) on Thursday August 25, 2011 @01:40AM (#37202158)

    I've never been into Second Life, or World of Warcraft, or any of those online games that've been known for people using real money to buy pretend stuff in the game - but, on an individual level, it's never bothered me. I figure it's those folk's money, so they can spend it however they want... just like I might buy a decent bottle of Scotch.

    But somehow, in the aggregate, this bothers me. I can't really put my finger on why, exactly; but it just seems like a sign our society is going down the toilet (or something equally dire). It's probably just because I'm older than most of these people, I suppose.

    • Re:I'm conflicted (Score:4, Insightful)

      by wvmarle (1070040) on Thursday August 25, 2011 @02:13AM (#37202350)

      Actually it doesn't really bother me, let them just go ahead.

      Many real-life games come with expansion packs as well. Settlers of Catan was (is?) a very popular one where people could buy extras to play with. It enhanced their enjoyment of the game, so they put down money to buy more parts for it - no problem with that, is there?

      Magic the Gathering is another game that has many expansion options. Many cards are there, some are becoming increasingly rare and have become collector's items. People pay a lot of money for it - even though it's basically just a piece of printed paper. There surely are people trading in this kind of cards, whether they make a living out of it I don't know but it will be possible.

      These virtual items I don't think are that different. It's a game, people enjoy it, and are willing to pay extra money to enjoy it even more. Some (probably most) of these traded items may be available to anyone playing enough, others may be created one-off by the game designer, whatever. But not everyone is willing to do all that work, they just want to buy the finished product. And as long as they're not scammed (i.e. they get what they pay for) it's fine with me. Let them go ahead.

      • by gl4ss (559668)

        buying wow gold is more like buying extra pawn pieces when playing chess.
        it's not like you get to bend the rules in settlers of catan by putting down real cash(well, actually many people would take that cash and let you have extra pieces..).

        • by vux984 (928602)

          (well, actually many people would take that cash and let you have extra pieces..).

          But then they aren't really playing settlers of catan anymore; its some derivative but its not the same rules.

          More importantly, I don't have to play with those people if I don't want to.

          If I could have that option in mmoprgs I'd be happy. Let the people who want to buy shit play on one server, let the people who don't play on another.

          Its cheating on one server, and heavily enforced bannable... and acceptable on the other. Hell

    • by will_die (586523)
      It is what people are willing to spend on entertainment
      As for the feeling that it is wrong most people have it because of the lack of a physical product. It is something that you will never touch and is totally controlled by someone outside of your control or abaility to contact in person.
    • by grumbel (592662)

      The bothersome part of all this isn't that people spend money on virtual entertainment, server space and computing time cost money after all, so one shouldn't expect to get everything for free. The bothersome is how it all developed in the last few years. It is no longer about providing the user with something of value, something that has actual real world scarcity, it all turned into a game of playing with human psychology and creating artificial scarcity. It's no longer about paying the provider for the s

    • by gregor-e (136142)
      Perhaps what bothers you is the niggling sensation that virtual life is slowly encroaching on real life, a trend that, by obvious extension, may ultimately mean that all the time and effort you're putting in on real life won't amount to a hill of virtual beans in the future. After all, who will want to visit you in your shabby little real-world McMansion when everybody else is living their own planet-sized castle?
    • by WarlockD (623872)

      Its about how transitory most things on the web is. Lets say you buy, a real example, Modern Warfare 3. It has a semi decent movie style single player campaign and a mufti player campaign you can play for months on. After a while you get board so they keep giving you DLC's to buy with new maps but in the end you put it aside for something else. A year latter when you want to play online again you find hardly anyone is playing anymore. You cannot get even in random ques to save your life. This doesn't

  • by Opportunist (166417) on Thursday August 25, 2011 @01:45AM (#37202178)

    It is that simple. A piece of linen cloth with colorful specks arranged in a certain pattern is called a painting, and if it happens that someone named Gaugin or Degas left those specs on the linen it's worth millions. Why? It's just some pigments on linen.

    You don't pay for the pigments and not for the linen. You pay for the arrangement. Likewise, you pay for the arrangement of those 0s and 1s.

    Is it worth that? If you ask me, no. But for some people it seems to be, and as long as there are people willing to pay real money for certain arrangements of pigments or pixels, there will be a market for them.

    Hell, some people pay me to tell them how to get their IT infrastructure secure. I don't even give them pixels or pigments, I only give them information without a carrier medium (ok, not entirely true, it's most of the time also encoded in 0s and 1s). But by the logic expressed in most other postings here, I shouldn't even get a dime for what I'm doing, yet there are people willing to pay thousands of dollars per day. Because they want it, because they're willing to pay for it, and because I'm willing to sell that information.

    Welcome to the market economy.

    • by Anonymous Coward
      For crying out loud, why is the concept of Virtual Land so difficult for people to understand? It's basically just web hosting. You don't pay for the 1s and 0s themselves, but for them to be hosted and be usable/capable with the environment you play in. What you pay for is a slice of server time and memory to host your 1s and 0s and to have a bunch of object definitions between two Euclidean vectors whilst also indirectly paying for support and further development of the technology which runs your environm
    • It's not even market economy, it's just perceived value, and that's been going on since mankind could only talk in grunts, and cave women traded sex for food.

      Why is gold valuable? Its not good for anything, I don't think it's even particularly pleasant to look at, Silver is much prettier. It however retains significant value due to its relative scarcity, and the value people place on scarcity.

      ((I'm ignoring the digital issue, where anything digitised has effectively infinite quantities, because we seem to

      • by mwvdlee (775178)

        It however retains significant value due to its relative scarcity, and the value people place on scarcity.

        ((I'm ignoring the digital issue, where anything digitised has effectively infinite quantities, because we seem to buy into allowing artificial scarcity to be created... which I don't get at all))

        You basically give the reason yourself. People buy into artificial scarcity because people place value on that scarcity; they feel they're buying something of more value (and as long as the scarcity is guaranteed, they do).
        It's like any "limited edition" product in real-life. There's nothing stopping companies from producing more of these limited edition items.

        • I was trying not to basically open up the can of worms that that is music and piracy. Copying an mp3 is only piracy due to the desire to create a scarcity of the item in question. Which in turn is supposed to drive up its value through that scarcity.

          Someone who copies this "scarce" mp3 could take pains to suggest that the value of the mp3 is artificial due to the artificial nature of the scarcity, and that if the scarcity is removed, it therefore intrinsically has little to no value any more.

          The default v

      • by Dunbal (464142) *

        Its not good for anything,

        It's actually quite good for a few things. It never rusts, it's an excellent electrical and thermal conductor, and it's fairly non reactive chemically meaning it usually sticks around for a long time. Best of all, it's pretty rare and you can't print it. Thus it's a great store of wealth. However if you subscribe to the Ben Bernanke school of thought then yes, gold is absolutely worthless and people who think that it makes a decent store of wealth should be mocked for believing in "tradition". You need to t

        • by stinerman (812158)

          As others have said on the subject, if you think that little green pieces of paper are worth less than gold, you are more than welcome to trade the little green pieces of paper for gold to someone who wants the paper more than they want the gold. No one is stopping you.

          I trust the paper because there isn't a single entity that I've done business with that hasn't accepted them in exchange for goods and services.

          If you're making an oblique reference to a gold standard, I respectfully submit that the Federal

          • by Dunbal (464142) *

            I have traded quite a fortune of little green pieces of paper for gold, when the exchange rate was 400 pieces of paper for one troy ounce of gold. I traded another stack of green paper for silver too, when the exchange was around 20:1. Ask me again what I think of the little green pieces of paper today? The rest of them have been swapped for Canadian pieces of paper when the exchange rate was 7:10. Now the exchange rate is around 1:1. I think your little green pieces of paper are silly, they just keep losin

        • And those properties makes it valuable to my grandmother how? Yes to electrical engineers, no to my grandmother.

          Also, don't get confused with the difference between "value" and "money", the two are not directly related (One man may value something greater than the other, and therefore is prepared to part with more money to obtain it). If major investors in gold decided that the value of gold was decreased in some way, fatuously say a meteorite of pure gold flattens France, it would suddenly become a poor

          • by Dunbal (464142) *
            I doubt your grandmother appreciates the value of rhodium or copper, either. What does that prove? Nah, everyone who says gold is nothing special is full of shit, because if you saw a solid gold coin lying on the ground I guarantee you that you would pick it up, do a little happy dance, and sell it. Why? Because you instantly recognize the value. So does everyone else. That is what makes it valuable, the world over. Wars have been fought over gold for thousands of years. So take your "story" and shove it. H
            • I see little to no value in gold, however the person I would sell it to does, which is why I would pick it up and sell it. You want an excellent parody of this? Look no further than Douglas Adams. The survivors of the crash on Earth attach value to leaves, and are trying to find ways of limiting its availability, Ford and Arthur are bewildered by this as the leaves have no perceived value to them. It's excellent parody. I'll ask you, if gold suddenly lost its scarcity, would you still perceive it as being
  • Maybe I'm strange, but I spend my days managing websites. Which are essentially virtual newspapers / magazines/ posters/ directories/ whatever. So what if it is a online designed 3d room, its just a online facility people pay for.

    I feel a strange separation to my work, because I know in 1000 years from now, no one will ever no I was alive or a person. There won't be an antiques roadshow describing how wonderful/shit my work was, my work wont exist it will be simply gone. Ancient potters, blacksmiths, artis

    • by dadioflex (854298) on Thursday August 25, 2011 @02:17AM (#37202374)
      To be fair 99.999% of people will pass and be largely forgotten within 3-4 generations. Probably 99% of potters, blacksmiths and even architects toil in complete anonymity and their work will be effectively unattributed within their own lifetimes. Don't sweat it. I used to get angry at all this virtual malarkey, then the economy tanked and I realised it was all virtual.

      I find your testicle-shocking vision to be intriguing, please tell me how to sign up for your newsletter.
    • by etrusco (576870)

      I hope you're drunk (I sure am :D ). It's not the question whether the medium is "real" or "virtual", the matter is whether the "fact" is real or virtual.

  • by F-3582 (996772) on Thursday August 25, 2011 @03:56AM (#37202838)
    Anyone remember this [somethingawful.com]?
  • There's nothing particularly earth shattering here. They create art in the form of private islands and then rent said art for profit. This isn't exactly a new phenomenon. They just make a decent chunk of money doing it.

  • I don't understand any of this, can anybody explain it to me in terms that are easy to understand please? I literally do not understand what any of this is. Like in a few sentences: what the hell?

    I mean I commend them for making money and building businesses with this stuff, I just don't understand why anybody pays real money for this, what does it do for them and how does this translate into real life (except for the customers becoming poorer of-course)?

    Basically I now find myself at this point in life w

    • by Sockatume (732728)

      They derive enjoyment from the product. I think that's the beating heart of the Western economy TBH.

    • by Vernes (720223)
      You have a digital platform on which people initiate a vast array of activities. To initiate your own activity to the fullest extend possible, it is advised to purchase an allotment of this digital platform to utilize as you wish.

      Comparison:
      The internet is a digital platform on which people initiate many activities.
      Through websites people engage in virtual sex, purchase of products, games in many shapes and form and purely for informational purposes. Should you ever want to initiate any of these activit
      • by roman_mir (125474)

        For somebody to pay for a product (especially for a not IRL product), it has to be scarce. People don't even like paying for music, movies, games, they copy them. So what makes people want to spend actual IRL money inside a computer game to buy clothing for avatar?

        I don't fully comprehend something: different people have different avatars and they can meet in the game and people see the avatars interacting? They can see the clothing on the other avatar but they can't have a copy?

        Basically Is the value of th

        • by Vernes (720223)
          Why are you surprised at how any market works?
          There are always people willing to spend alot of time creating an alterego.
          Games with highly detailed character creation functionality draw specificity these people.
          In old times people raised their phone bills through the roof just to chat with their 'friends' on chatboxes.
          Free to play games using micro-payments have based their business model about the very concept that people are prepared to spend money to enhance their entertainment experience.

          This prin
    • by gregor-e (136142)
      Your cognitive dissonance is implicit in your question - "...how does this translate into real life...?". For an increasing number of people, the virtual worlds they spend time in ARE real life. What you think of as real life is for them just a means for supporting their existence in the worlds they prefer to spend their time in. How many Wal-Mart stockers only work to support their WoW addiction? If given a chance to ditch their real world job and become gainfully employed within the virtual world of t
      • by roman_mir (125474)

        Above in this very thread there was somebody else answering the question, but I asked the follow right back at them - why would anybody buy things for money they have to work for (after all, we are not spirits just yet, we need food and shelter and medications and clothing and vacations and other things), after all, many people are not even willing to buy books or music or video games or movies, they just want to copy. But in this case they are renting "properties" in virtual world and paying actual money f

  • People pay anywhere from $5 to $50 for 1s and 0s all the time. Every time a video game is purchased you pay for 1s and 0s. How is this any different? You pay membership dues to various organizations, and once you stop paying you don't take anything with you except the memories. If you have ever paid $100 to go to a Broadway musical, you paid for something you can't touch or own. This is not any different than any other thing you pay money for that you don't get to keep. It's not really that difficult
  • Anshe Chung was big back when it looked like Second Life might take off. It is not news that he/she has made a lot of money on Second Life. There was even an article here on slashdot two or three years ago. Anshe Chung made a lot of money by recognizing the possibilities early, just before the buzz hit about Second Life. Since Second Life has passed its apogee, Anshe Chung has managed to continue making money by being one of the dominant players in Second Life business (as a result of having gotten there fi
    • by Vernes (720223)
      no one has figured out how to do real world business in a virtual world
      700 US Dollars tell me otherwise. But that is selling what people WANT inside a virtual platform.
      A friend works with a company that sells real-estate and has virtual versions of the houses people can walk through inside Second Life to get an impression of it.

      Today, Second Life is a visual chat room
      And a FPS, Roleplay Platform (granted, alot of chatting going on), an Educational Tool, Prototyping Tool, a Marketing Tool, an Art Medi
      • The real reason lies with the company Linden Lab.

        I would definitely agree with you there, although I do not think it is just because it does not see the need to advertise its virtual platform. I have a friend who is a content developer on SL and makes a pretty decent amount out of it (before the economy went south, he was making more out of his SL business than I make at my RL job), but all of his income from that business came from people buying things inside SL for use inside SL.
        The real estate idea is interesting, but do they really get a competitive

  • Really, this article is years behind. Anshe Chung hasn't been relevant in the pantheon of virtual land barons for ages.
  • I thought this was old news, and that the millions she made were revealed [smh.com.au] to mostly be through "virtual prostitution" of sorts?
    And that when some folks found out about her having an interview within Second Life, they hilariously griefed her [youtube.com].
    • No, Anshe didn't make the big bugs in virtual prostitution, that only provided the seed money as far as I know....her big bucks came from her HUGE private island estate business that she build up Dreamland or whatever she calls it. As far as I know she's still the biggest single "Land Baron" in SL.

  • This was news like 6 years ago, the real news is that second life has not caved in on itself in a cestpool of land sharks like the one mentioned in the article getting you to "rent" space on a plot and then bans you from it a week later, furries sex slave, and fucking retard noobies trying to cyber fuck every square inch of the place while advertising a "bank" scheme.

  • Is this really any different than people throwing hundreds of dollars at the latest device from Apple? Look at the people who replace a perfectly good device with one that's newer but offers little additional functionality.

    I'd argue that the motivation driving people to buy the latest gadget is identical to the motivation behind someone buying a piece of virtual property. It's pure emotion; the happiness of unwrapping and enjoying something new.

    There are a lot of people in the real world making a ton of mon

  • The way to think of Second Life is a distributed game company. Most games, the code, the game servers, and the game content are all done by one company. In Second Life the servers are run by the host company (Linden Research Inc.) The code is open source for the "Viewer" (the program you download and run to play Second Life). A majority of users actually run alternate versions of the Viewer made third parties, that have better features than the official one. And lastly, 99% of the content is made by a s

  • I would so laugh if a real estate scam happened to happen on someone that used a scammed visa card to pay with....both would negate the other, no?

It was kinda like stuffing the wrong card in a computer, when you're stickin' those artificial stimulants in your arm. -- Dion, noted computer scientist

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