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The Almighty Buck Entertainment Games

Virtual Property Investor Recoups Investment 208

Posted by samzenpus from the exciting-new-investment-opportunity dept.
afaik_ianal writes "Remember that guy who bought a virtual island in "Project Entropia" for £13,700? Well BBC is reporting that that he has managed to make his money back in under a year. According to the article, 'He made money by selling land to build virtual homes as well as taxing other gamers to hunt or mine on the island.'"
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Virtual Property Investor Recoups Investment More

Virtual Property Investor Recoups Investment

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  • Old proverb (Score:1, Funny)

    by Anonymous Coward
    "When (your stupidity) dealt you a lemon, you make lemonade"
    • Spending big money does seem silly, but spending a few bucks here and there for a virtual subdivision is perhaps not (eg. a $20 gift to that game-nut pal). What this guy has done is create a service whereby he can onsell his asset at a low price point. Not really that stupid after all.

      • Re:Clever angle though (Score:5, Insightful)

        by ImaLamer ( 260199 ) <john@lamar.gmail@com> on Wednesday November 09, 2005 @10:11PM (#13994644) Homepage Journal
        What this guy has done is create a service whereby he can onsell his asset at a low price point. Not really that stupid after all.

        The same rules apply in the virtual world. You've got an area you call your own, the resources on said area are also your own. You could try to get a return on your investment by holding these resources until the time is right to sell, sell off portions of the resource or do nothing and be happy spending money.

        Would you live on a farm that produced no product? If there were natural resources such as gems, petroleum or even attractions like waterfalls wouldn't you be at least thinking about ways to make money on them? Sure, there are some that would let people see the attraction for free, ignore the value of minerals that must be harvested in crude ways or refuse to let people shoot their animals and hook their fish for any reason, especially for money.

        It's exactly like buying an island and turning a third into a resort, a third into destination spots (businesses, pristine land, room for activities) and leaving the remainder to your own enjoyment.

        I mean, this guy does hunt on his own virtual island right?

  • Bank loan (Score:5, Funny)

    by ebsf1 ( 689864 ) on Wednesday November 09, 2005 @09:49PM (#13994505)
    Hmm...I can see it now. Yes Mr Bank Manager...I'd like a loan to buy an island. Where is it? Well...it's virtual...
    • "I'd like a loan to buy an island."

      So do they come to get you in the real world or the online world if you default. Be pretty funny if the bank had its own guild.

  • So this proves... (Score:5, Funny)

    by nelomolen ( 128271 ) on Wednesday November 09, 2005 @09:49PM (#13994513) Homepage
    that either this guy is incredibly smart and the people who bought into his virtual property are incredibly stupid, or that he's incredibly stupid and everyone who bought into his virtual property is... well, still incredibly stupid.

    -barton

    • Re:So this proves... (Score:2, Insightful)

      by utnow ( 808790 )
      I don't get how this is stupid...

      I would wager that ALOT of the folks who will end up reading this play these games... WoW, Everquest...etc.

      Do you pay to play these games? yes... you're paying to spend your time to build up repore in an online game and have fun. This is no different.

      Buying a peice of online real-estate is no different than buying software, a database of information (email addresses... phone numbers... businesses...etc)..

      Actually... it's REALLY similar to buying a domain name. How many of
    • A little bit from column A, a little bit from column B.

      Things have worth that others ascribe to them. For some reason, folks assign worth to this 'virtual' space, this collection of 1s and 0s, primarily, I assume, because of the expectation that others ascribe similar worths to these 1s and 0s. The problem is, there's really no inherent value to these 1s and 0s, like there is to, say, real estate in the physical world, or ownership in a company that has real assets.

      Therefore, the whole 'value' of these

      • Do you have all of your money under your mattress, or is some of it just ones and zeros in banking software?
        • Money is all about faith as well, be it hard cold cash or stored as 1s and 0s in the bank. The day that the majority of the world decided that a particular currency is worthless... well, sucks to be holding that currency, be it under the mattress of in a bank.

          But my point was not that 1s and 0s are inherently worthless. They have worth if people ascribe worth to them. The 1s and 0s in a bank have real worth since they represent real money which has (currently) worth in reality. But what worth do the 1s an

      • Therefore, the whole 'value' of these 1s and 0s depends strictly on the false value people give it.

        The "value" of anything, 1s and 0s included as well as cars and houses, is the value people give it. The 1s and 0s ChoicePoint [choicepoint.com] has are valuable to lots of people, but still are 1s and 0s. The difference is that ChoicePoint's 1s and 0s idealy represent real world phenonema that can be leveraged for real world cash.

        In this game, the 1s and 0s are supposed to mimic property. The reason property is valuable in

        • They'll stop because they're interested in the economics of the game. If costs of virtual real estate get so high they're a deterrent to people playing the game, they'll add more to keep it balanced. If prices fall, maybe they'll raise the water level worldwide to shrink available land.
      • Actually, "Real" property can go to zero, or even negative value. Having worked with Pollution Insurance as a part of our system for some time, I have read quite a few cases about polluted lands which will cost many times the "value" of the land to rehabilitate the land to the point of usability. Quite often, this discovery is a "surprise" to the current land owner, because of either under documented prior use or nearby impacts.

        Likewise, many "property" items (vehicles, say) have value only based on ready a
    • Actually this guy is virtually smart but actually stupid, his buyers are actually stupid and virtually stupid as well. In the virtual world they will be investors but in the actual world they are suckers.
    • No more stupid than the people in the States that bought shares in WorldCom and Enron, or the people here in Australia that had stock in HIH. It's worth whatever the market and the people within it decide it's worth, no more and no less.

      And if you want to claim that it's "virtual" and thus not "really" worth what it sold for, then don't look too closely at why diamonds are priced as they are.

      • No more stupid than the people in the States that bought shares in WorldCom and Enron

        Well WorldCom and Enron are regulated by the Securities and Exchange Commission. As such, their stock was finite (i.e. they wern't just inventing shares, there was a limited supply and at one time a high demand - making the stock valuable.) What's to stop the game makers from just adding another nice island? And another, and another - then they aren't rare, leaving the first guy with light pockets while the last guy can

  • http://games.slashdot.org/comments.pl?sid=132758&c id=11084873 [slashdot.org]

    One of the many similar comments on the older /. story :)

  • Virtual Property (Score:5, Insightful)

    by lukewarmfusion ( 726141 ) on Wednesday November 09, 2005 @09:52PM (#13994533) Homepage Journal
    Virtual Property, eh? Not at all like domain names, right?

    Online "property" has as much value as people are willing to pay for it. This is why we spend thousands of dollars on shiny rocks and metals (to say nothing of the diamond cartel). This is also why we hold onto generally worthless items because of sentimental value. (I had my Chuck Taylor All-Stars for years after they were too worn out to wear).

    So I'm not surprised that this guy is making money. He found something that he expected people would want, and snatched it up so he could be the one to sell it to 'em.

    • Re:Virtual Property (Score:3, Interesting)

      by Saeger ( 456549 )
      Unlike in Real Life meatspace, (an instance of) virtual property doesn't have to be scarce, but it's almost always modeled into games that way. It's easy for people to relate to I guess, and allows for status and old-fashioned empire building.

      I'd like to see abundance modeled into more game worlds. I mean there's no good reason (other than familiarity) for virtual realestate to be kept artificially scarce in a game where "space" isn't real -- your 10,000 acre slice of paradise could exist anywhere with mu

      • You don't understand scarcity correctly. How "scarce" is land in the US? If you are talking about the middle of North Dakota, not all that scarce. If you are talking about downtown NYC, then it's pretty damn scarce. Even if you could create as much land as you wanted, that wouldn't mean the land would lose it's value. The land near popular destinations would still have value, perhaps not as much value, but it is still scarce. So therefore, even if they had unlimited land there would still be scarcity.
        • >Even if you could create as much land as you wanted, that wouldn't mean the land would lose it's value.

          This is the virtual space after all, where does it say you have to be limited to the structured 3D of the real world? You can have your 10,000 acre paradise as a simple door off a building in the "very interesting virtual spot" for example, one click and bam! Your visitors are in paradise.
      • here is my take:

        Land is NOT scarce on this planet. We could all spread out and own a good number of acres --

        world land area: 510.072 million sq km (cia world factbook) = 126 billion acres

        world population: call it 6 billion (CIA says 6.5).

        126E9/6.5E9 = 21 acres per person.

        Game land could be infinite. Nobody would care. The price would be the same.

        People go where the people are. People want to be where 'stuff happens'.

        It is also a transportation issue, of course, just like in real life. Look what the car did
        • One thing to consider however, is that real land, on the planet Earth, is not all created equal. There are a lot of different factors that make different places more or less desirable for different purposes. I'd gladly give up my 21 acres of nevada desert for a half acre of temperate forest on rolling hills or something. People do generally congregate, but there's usually a reason that people ended up in a particular area in the first place. That spot/area/climate/whatever had some sort of appeal. And it's
      • Actually, virtual property does have to be scarce because it is modeled on real finite hardware. It just doesn't have to be nearly as scarce as it is.

    • Re:Virtual Property -- Supply and Demand (Score:5, Interesting)

      by joecode ( 909691 ) on Thursday November 10, 2005 @01:40AM (#13995635) Homepage
      Not so. The domain name space is stricly limited. But there is an unlimited supply of virtual reality. Therefore: It's just a pyramid scheme in disguise.
  • All we are is walkon extras in someone else's sim. Reboot yourself!

  • Developer's Giddy (Score:4, Interesting)

    by cbrhea ( 929943 ) on Wednesday November 09, 2005 @10:00PM (#13994576) Homepage
    Now they can create another virtual island that's even sweeter and sell it for even more money.

    copy virtual_island1 virtual_island2
    print money

    Not a bad deal for the island-buyer either, as long as they've determined the risks, ie. the game's subscriber base withering away.

  • It'd almost be worth buying an acre or two (Score:4, Funny)

    by Flower ( 31351 ) on Wednesday November 09, 2005 @10:12PM (#13994648) Homepage
    just so I could trash the place up and bring the property values down. Cut down some of that scenic view to build my shack, grab some low-res tires to plant some flowers that I can't keep alive alive anyway and play a boombox so I can blast techno/rap/heavy metal gospel across the neighborhood. Mow the lawn? You gotta be kidding me.

    And nobody better be touching my still out in back....

  • Glorified Slots machine (Score:5, Insightful)

    by Anonymous Coward on Wednesday November 09, 2005 @10:25PM (#13994725)
    Project Entropia's fundamental idea is that everything in game has a real-world value. You begin the game with nothing; and must purchase in-game items with real money. Items you use to harvest resources, kill monsters, or any other activity which generates saleable objects in the system decay over time. You give Project Entropia money to buy objects in game, that money flows into MindArk. When you sell an object and withdraw real life cash, that money flows away from MindArk.

    Given that, the Project Entropia system cannot generate rewards greater than the amount of money fed into the system, minus however much MindArk takes off the top.

    You are using a virtual tool that decays, purchased with real money, attempting to generate a positive income in a system already rigged to prevent such a scenario on average. Your tool will break, and you will buy another one, in the hopes of getting that big payoff. It's a gambling system dressed in some livelier colors.

    • Project Entropia's fundamental idea is that everything in game has a real-world value. You begin the game with nothing; and must purchase in-game items with real money. Items you use to harvest resources, kill monsters, or any other activity which generates saleable objects in the system decay over time. You give Project Entropia money to buy objects in game, that money flows into MindArk. When you sell an object and withdraw real life cash, that money flows away from MindArk. Given that, the Project Entro

    • Given that, the Project Entropia system cannot generate rewards greater than the amount of money fed into the system, minus however much MindArk takes off the top.

      Sounds like day trading the stock market. You can't make money unless other people put in money.

    • Erm, sounds a lot like real life, no? The farmer buys the tractor that decays over time, but during its usable lifetime, he uses it to harvest grain, which he sells to others.

      MindArk's take from the top is no different than the government's take off the top in the form of taxes. That revenue provides services - the servers and code in MindArk's case, roads, schools, a judicial system, and so forth in 'reality.'

      • Erm, sounds a lot like real life, no? The farmer buys the tractor that decays over time, but during its usable lifetime, he uses it to harvest grain, which he sells to others.

        Except that this is completely rigged so that you will almost always lose. There is the occasional win (i.e. earning back your money) but this is compensated by other people's losses so that ultimately, MindArk are the only winners.

        The tractor will break down soon. In PE:

        You will keep having to buy new, expensive ammo to keep you

      • Except the farmer with the tractor makes food, which I can eat to stay alive. The tractor-maker may invent a better tractor, which allows the farmer to make more food, so even though the tractor-maker does not make food, increased productivity still leads to more "wealth" in the form of food. If you include all elements of the system, meaning the sun as well, "wealth" is conserved, but since on Earth we can approximate the sun as infinite, there is always more wealth to be created (not to forget also that
    • The economy cannot generate rewards greater than the amount of money in the system (money=natural resources), minus however much gets taken off the top (one-way conversions such as burning oil). You are using a tool that decays, in a system already rigged to prevent any net growth. Your tool will break, and you will buy another one, in the hopes of getting the big payoff. It's a gambling system dressed in some livelier colors.

  • Just another Luxury (Score:4, Insightful)

    by e2d2 ( 115622 ) on Wednesday November 09, 2005 @10:26PM (#13994736)
    This got me to think a bit, how is this any different from buying an over priced pair of shoes? or a nice car that costs $250k USD? Or a diamond necklace that is not truly rare at all? It's an idea that is being sold, and idea that this particular exchange has value. Market value, someone is willing to pay.

    I personally don't see the need or even want in this but it's not my money..

    • how is this any different from buying an over priced pair of shoes? or a nice car that costs $250k USD? Or a diamond necklace that is not truly rare at all?

      The difference is that the game producers can very easily produce whatever they want in the game. Fancy shoes take raw material (leather, which takes raising a cow and tanning the hide and so on) and manufacturing (a hand craftsman that produces sharp looking shoes) which all takes time. Thus fancy shoes are more rare than a copy and paste action on a

    • "Market value, someone is willing to pay." There is the difference. Once you buy a pair of shoes or a diamond necklace, it's yours. Nobody else wants it or will pay much for it. But this guy apparently found that this ... nothing ... was eminently salable. It's more like a baseball card than a pair of shoes, there was at least some hope that its value will rise instead of dropping like a stone.

  • Time involved? (Score:5, Insightful)

    by jebiester ( 589234 ) on Wednesday November 09, 2005 @10:33PM (#13994770)
    It would be interesting to find out how much time he spent selling his sub-divisions or enforcing his taxes. If this took the equivalent of a full time job or a lot of time, he hasn't necessarily made any money back, just earned a small wage as well as loosing part of his initial investment in the sales.
    • Having never played the game I can't say but I wouldn't be surprised, if the developers thought it out, that he could script the taxation. Go onto island aim gun and shoot, then get a pop-up window stating how many PEDs it's going to cost to bag the animal. I could see mining done the same way. The actual selling of property I would see as wanting to keep as a manual process allowing the option to maximize profit and have some fun bargining with the other players.

    • Re:Time involved? (Score:2, Insightful)

      by SsShane ( 754647 )
      For someone to invest so much money, he probably enjoyed every minute of it.
    • "It would be interesting to find out how much time he spent selling his sub-divisions or enforcing his taxes. If this took the equivalent of a full time job or a lot of time, he hasn't necessarily made any money back..."

      Not really, depends on what he would have been doing instead. If he would have been using that time just playing some other game anyway then he has made his money back.

  • All this time I thought playing video games was about having fun and getting a high score!

  • Advice.... (Score:5, Funny)

    by greenguy ( 162630 ) <(estebandido) (at) (gmail.com)> on Wednesday November 09, 2005 @11:04PM (#13994931) Homepage Journal
    Everyone always told me to invest in land, because "they're not making any more of it!"

    Little did everyone know....
  • Reminds me of the time I bought into the slashdot IPO.
  • I haven't read the terms of use of this MMORPG, but I wonder what guarantees these buyers have that the game sysadmins won't decide to create another virtual island and sell it to someone else, devaluing the pre-existing virtual properties? When central banks see times getting tough, the temptation to just print money has proved irresistible in the past.

  • Opportunity Costs? (Score:2, Insightful)

    by scishop ( 622414 )
    So he managed to regain his investment, but what could he have made with his time and money if spent elsewhere. In a CD the money would have easily been earning 5% annually and could have potentially returned much more if put into more risky investments. More importantly what could he have earned if he spent his time working at some other occupation instead of hyping his real estate? You can easily earn over £13,700 working a real job in a year. Opportunity costs are the name to the game here.

  • All your virtual items are belong to us! (Score:3, Informative)

    by Anonymous Coward on Wednesday November 09, 2005 @11:35PM (#13995068)
    From the "Project Entropia Conditions of Use":

    As part of your interactions with the System, you may acquire, create, design, or modify Virtual items, but you agree that you will not gain any ownership interest whatsoever in any Virtual item, and you hereby assign to MindArk all of your rights, title and interest in any such Virtual item.

    From the sound of it, the user doesn't own anything... I wish I could sell nothing for $100,000.
  • Jon Jakobs just bought the virtual space station for $100G, he's going to turn it into a cross between Jurassic Park and a disco.

    As Dave Barry is so fond of saying, I am not making this up.

  • hmm (Score:2)

    by DaveJay ( 133437 )
    Some people are saying "the people in the game paying for space on the island are incredibly stupid", but I say bravo to all of them; he paid a lot of money for the opportunity to create something other people would enjoy, and in so doing added enough value to make his money back (and presumably a profit).

  • Many have scoffed that this individual paid good money for nothing tangible, and then sold it on to others who also got nothing tangible. This is neither innovative nor new. The currency or futures/options trading markets have been doing this for years. The stock exchange companies even make a cut of each trade---a profit from the intangible profits made from trading virtual or as-yet-non-existant goods.

    • The currency or futures/options trading markets have been doing this for years.

      Yea, but in the US these markets are regulated. Therefore, the companies can't just produce stock out of nothing. Therefore the stock is rare, and if demand is higher than the supply, the stock has a positive value.

      Contrast this with the game. The game designers can pump out islands as fast as they can hit copy and paste. There's no regulation to stop them from just adding another island, and another island, as long as they w

  • Johnny: Mommy, when I grow up I want to be a virtual real estate tycoon and make lots of money!

    Mom: Ok Johnny, but if you want to be successful you'll have to spend a lot of time playing your online games, and you might even need to skip some classes.

    Johnny: I'm willing to make the sacrifices!

  • Remember that guy who bought a virtual island in "Project Entropia" for £13,700

    Sure, he bought a virtual island in cyberspace. But in the real world, he lives with a roommate in a U-Stor It room.

  • This is nothing to get worked up about. Just like any scenario in which money is traded between players based on some set of rules, someone has to come out on top, or else no one would play it. Like any casino game (or lottery), someone is bound to win (of course the house always wins.)

    You have to wonder whether "Deathifier" is as intelligent as so many people on this website are suggesting, or whether he A) was one of the lucky ones or B)simply worked alot harder than the other people to sell his propert

  • Looks like there are more than a few suckers born every minute.
  • Is it really such a big leap from government selling you land and a company selling you a portion a memory. With a land purchase from a government you are entering a contract with them, the government can change its mind and take back the land, the government can fall and you land claim is null.

    Now companies go under way more often then governments, but governments do go under, and land claims are invalidated. But it is similar.

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