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The Almighty Buck Games

Virtual World, Real Banking 65

The Opposable Thumbs blog brings news about MindArk PE AB, a Swedish game developer whose MMO Entropia Universe has an in-game economy based on real money. It seems the company has been "granted preliminary approval for a real banking license by the Swedish Finance Supervisory. ... MindArk's going to be just like a bank in the real world: it will be backed by Sweden's $60,000 deposit insurance, offer interest-bearing accounts for its clients, feature direct deposit options, let players pay bills online, and apparently will offer loans to customers." An Associated Press report adds that "The economic activity in Entropia Universe was worth about $420 million last year, about the same as the Pacific island nation of Kiribati, population 110,000. The game has 850,000 player accounts, though not all of them represent active players."
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Virtual World, Real Banking

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  • Dangerous (Score:2, Insightful)

    Can you say, 'Money laundering'?
    • by michaelhood ( 667393 ) on Sunday March 22, 2009 @01:26AM (#27285797)

      May-maybe we launder the money.

      That's a great idea. Ok, how do we do that?

      I don't know, I don't know. I don't even know what it means. It's
      something I think, I think coke dealers do.

    • Re:Dangerous (Score:4, Informative)

      by Fizzl ( 209397 ) <(fizzl) (at) (> on Sunday March 22, 2009 @05:46AM (#27286683) Homepage Journal

      Considering that entropia is merely a glorified casino, I am very surprised it they are actually granted the license.

      I tried "playing" entropia for maybe 20 bucks a year or two back. Atleast then it was blindingly obvious that the success revolved around chance and diminishing profits. I tried hunting and mining. Manufacturing seemed too expensive to even start with. Munitions for mining and repairing for hunting were just slightly more expensive than the profits even when carefully done.

  • by fuzzyfuzzyfungus ( 1223518 ) on Sunday March 22, 2009 @01:04AM (#27285649) Journal
    As we've all seen, the financial sector has thousands of man-years of experience playing games with other people's imaginary money. They should find this new line of business a natural fit...
    • Re: (Score:1, Insightful)

      by Anonymous Coward
      Imaginary money is useful stuff. I use it on a somewhat regular basis. The key is to remember that you have to replace it all with real money, eventually, or there's trouble.
      • by cjfs ( 1253208 ) on Sunday March 22, 2009 @01:36AM (#27285875) Homepage Journal

        Imaginary money is useful stuff. I use it on a somewhat regular basis. The key is to remember that you have to replace it all with real money, eventually, or there's trouble.

        I've always found it interesting that people are so willing to accept my pieces of paper for real, solid goods.

        The difference between USD and monopoly money is just a matter of confidence.

        • Re: (Score:3, Funny)

          by Jurily ( 900488 )

          The difference between USD and monopoly money is just a matter of confidence.

          Yeah, at least monopoly money is not dependent on China.

        • The difference between USD and monopoly money is just a matter of confidence.

          Yes, it is. The USD has the full faith and backing of the most powerful government in the world, which in turn has the backing of a third of the world's entire GDP. Even in the worst of times, the people running it's printing presses are at least nominally sane.

        • The miracle of Worgl (Score:4, Interesting)

          by Colin Smith ( 2679 ) on Sunday March 22, 2009 @08:39AM (#27287321)

          During the 1930s depression, a little town in Austria called Worgl decided to print their own money, since the national currency was in such short supply.

          It worked wonders, unemployment went from 30% to less than 5%.

          What makes money worth something is the market. Is there a market for it? Since the Worgl money was produced by the local council and accepted for all council payments including taxes, there was a ready market for the money.

          The utility of money is that it is readily exchangeable for goods and services.

          You use cheques? You use credit cards? Debit cards? None of these are "official" money. They are not US dollars. They are credit, created and supplied by private banks. That credit is exchangeable into paper dollars as required. The current recession is caused by banks denying people access to that credit.

          Credit is imaginary money (whereas paper is not) because it vanishes. Credit is created (from nothing) when you take out a loan. Along with the credit, there's a debt. The debt pays interest and the credit vanishes as the debt is paid. Hence credit is "temporary money". Also, there is far more credit than there is real money, about 95% of money is bank created credit, so if everyone went and asked for paper dollars, there wouldn't be enough to pay them all. This is the dirty little secret of banking. Banks don't just hold and loan out money. They create new imaginary/temporary money which they loan out to you.

          So. Bankers are people who actually do create monopoly money. On a daily basis and on a massive scale. You now understand why they are always telling you that you "must have confidence in the banking system"?

          • by Fjandr ( 66656 )

            Shh... Fractional reserve banking works because so few people actually understand how and why it works.

          • Exactly. The Federal Reserve is not actually federal at all, it is a collection of banks that loan fiat money at interest through the process of fractional reserve to the government. The only thing the government does is assume the debt and print the physical dollars if neccessary. This saddles us with unsustainable debt when the government could do the exact same thing itself without incurring the debt. Money is merely a receipt of goods/services. People throw up the argument of inflation whenever the
          • Well put. I would only add that all money is imaginary, and it simply serves as a medium of exchange for human endeavors. It's a beautifully chaotic system, in that it essentially works, and attempts to control it are met with limited success.

  • I'm not even sure where to begin.
    So what happens if someone hacks your player account and takes out a mortgage on your house?
    • So what happens if someone hacks your player^W bank account and takes out a mortgage on your house?

    • Re: (Score:3, Interesting)

      by Vectronic ( 1221470 )

      As michaelhood pointed out (I think)... it's probably just as likely as hacking your normal bank account.

      As for mortgages, or purchasing a house/car/etc, I presume that those will still require face-to-face meetings and signatures, at least until an assortment of biometric nonsense improves.

      It seems for now, or at least according to the article it's mostly an inward sort of thing, money comes in, but doesnt go out except for (what's now) somewhat normal things you may already do online, pay bills, which wil

      • Re: (Score:3, Interesting)

        by MoralHazard ( 447833 )

        Kind of OT, but...

        The simplest scheme in real estate fraud is to rent a house, fill out some fake land title transfer paperwork, and then impersonate the lawful owner and either (A) sell the house to an unsuspecting, honest buyer, or (B) take out a bank mortgage on the house. Either way, you walk off with cash-in-hand.

        Read and learn: . Google for many more news stories.

        The really nasty part, here, is that the o

        • by Fjandr ( 66656 )

          While this may be true to a limited extent in the US (as each state has its own laws in regard to real estate transactions, and fraud in general), it is by no means universal there. A land title purchased in good faith can in fact be voided if the sale was he result of fraud. That's the point of title insurance: to protect the buyer and/or the person providing credit to the buyer should a title defect be discovered at a later point.

          Without title insurance it is entirely possible that a buyer can foot the en

  • And we all know how well that one turned out.

    (Well, actually, we don't, which is why you spy clueless doofuses still trying to set up shop there in some form of another. I wonder if the recession will aid in putting an end to such foolish waste...)

    • by michaelhood ( 667393 ) on Sunday March 22, 2009 @01:31AM (#27285845)

      A quick trip to Wikipedia tells me that Entropia predates Second Life by more than 6 months. And as far as I know, their underlying model has always been based on real money, just like Second Life's.

      • by Lordfly ( 590616 ) on Sunday March 22, 2009 @01:44AM (#27285923) Homepage Journal

        The difference is SL is wealth generation is based on the creation of new assets and the flexing of your creativity. Entropia's money-creating scheme is more akin to a casino; the house generally always wins.

        The end result may be the same (perhaps 10-20% of all of the creative people in SL actually see a significant profit, and perhaps 10-20% of Entropia's players are the same way), but I'd rather take my chances with creative output that I own the rights to instead of a grindfest stacked against me.

        Disclaimer: I'm a semi-dormant SL guru and virtual worlds developer since 2003.

        • Re: (Score:1, Insightful)

          by Anonymous Coward

          I'm a semi-dormant SL guru

          So your avatar has a beard and sleeps on top of a mountain. And when another player approaches you'll offer some deep-sounding but essentially meaningless advice.

          Am I close?

    • Re: (Score:2, Informative)

      by Ghubi ( 1102775 )
      Entropia is a game. It has a rule-set, monsters to kill, etc. Second Life is not a game.
  • Why not? (Score:3, Insightful)

    by MikeFM ( 12491 ) on Sunday March 22, 2009 @01:17AM (#27285737) Homepage Journal

    How is this any different than having a mobile interface or a web interface? It's just a new way to access banking integrated into a virtual world.

    • Why not? Well, there's no legal or moral reason why not, just an aesthetic/cultural one. It's probably going to suck, just like most other "virtual worlds."
      • by Fjandr ( 66656 )

        Yes, it does suck. It's quite effective at sucking. That sucking sound is your bank account emptying as you play the game and replace your equipment from your bank account, with little chance of actually fully recouping your losses through play. Profit generation is a gamble and more about luck than anything else in Entropia, which will make it fit in quite nicely into a bank's profit generation.

        Imagine being able to create money out of nothing, loan that money to someone you know is going to gamble it away

  • One of the problems when virtual currency = real currency is that people can now affect other people's money. When the whole BoB thing went down, I was just thinking of the economical impact that had on that corporation. If someone hacks the system or accounts, is that going to be considered theft? Will selling a fake item be considered fraud?
  • people making and losing real money playing computer games []

  • MindArk's going to be just like a bank in the real world...

    ... complete with the service charges! []

    Including a minimum withdrawal of 100 USD and a service charge of 10 USD (or higher) per withdrawal.

  • I've been wanting to try Entropia for a while now. My old PC was too far under spec to really run the game besides logging in and viewing a slideshow. My new PC easily meets the specs except..they don't support Vista O_O XP or below.. Which is quite sad since there are so few science fiction MMORPG's out there and even if only 100k or 200k of that 850k are active that's still quite a big enough player base to populate servers daily to warrant giving it a try.
    • Re: (Score:3, Insightful)

      by BarneyL ( 578636 )
      You're not missing much. While I haven't tried it in a while when I did the game was basically one big slot machine.
      You buy ammo at a cost of about 1 cent a shot, you then shoot animals and hope that whatever they drop is worth more than the ammo you use - it almost always won't be, once in a blue moon you hit the jackpot and make a profit.
      You buy mining equipment and survey charges at 10 cents a go, you let off the charges to locate minerals and hope the minerals are worth more than the charges you use -
  • Digital cash (Score:5, Interesting)

    by geekgirlandrea ( 1148779 ) <> on Sunday March 22, 2009 @02:10AM (#27286023) Homepage

    Now I want to write a cypherpunk-themed MMORPG, and set up something like this as cover for connecting an cryptographically anonymous digital cash system to the real-world banking infrastructure.

  • If I wanted to play around with real money there's nothing stopping me from logging into my bank's online banking or doing some e-trading on the stock market. Since I don't really enjoy those things, why would I enjoy a game which is that tied to normal life?
  • Terrific! (Score:3, Insightful)

    by nedlohs ( 1335013 ) on Sunday March 22, 2009 @02:42AM (#27286155)

    So now if you manage to collect a bunch of money in a game you have to file an FBAR with the IRS.

    • So does this mean I'll be able to sue ninjas in small claims court?
    • So now if you manage to collect a bunch of money in a game you have to file an FBAR with the IRS.

      Generally, the IRS will only be interested when you pull money out of the game. They have little interest in money that you have sitting in an overseas account. It's when you withdraw from that account into the US that they'll want their cut.


      • If you have more than $10k in foreign accounts and you don't tell them and then they later find out - even if you didn't earn any interest and hence owe no taxes - you are in a world of hurt.

  • Flaws (Score:2, Informative)

    by TigerTails ( 1453761 )
    This system is just open to so many flaws.. both technical and otherwise. Technical side of it, a bug appears, a user somehow managed to make millions in a matter of minute, and.. oh look.. he can just turn it into real money and run away never to be seen again. Otherwise-side of it, the company could easily use this to cover some unlawful transactions, with so many odd and seemingly pointless transactions and deposits, who would notice one rogue equally as useless transaction.. Another thing to note is, wh
    • Will the company be able to just take money off me whenever they want because it's "their game", dispute it been real money..?

      That's my biggest concern too... when its a game, they can claim whatever they want and do whatever they want to your account. Where if it were a bank, then it would get the government involved pretty fast (unless they somehow corrupt them as well, which would be an even worse problem anyways).

  • It was possible to make money in entropia universe (Then called Project Entropia). Hell I did it. I sold my account for a little over $15k USD when I got out of it in 2005. Bought a Delorean with the funds. :D Now days it's pretty much just a glorified casino as others have mentioned. The only people who make money now are mindark, and the players that have been around since the beginning and have the highest skills and gear that isn't available anymore. 98% of the player base is going to lose pretty much

Machines that have broken down will work perfectly when the repairman arrives.