Wednesday, May 03, 2006

Virtual money in the real world

Complicated publicity stunt or new economic model? As previously reported, there is growing economic importance in virtual worlds and MMORPGs. Players make virtual money from selling loot and goods within game. The in-game economics can be complex and involve all sorts of new assumptions about value, and warrant studies on the phenomenon.

The next logical step for the growing online economy is to make a jump from virtual value into the real markets. Online players can acquire goods and currency from the game, and then these goods can be converted into "real" money via auction sites or specialised sellers. There is enough of a market that it has prompted "farming" of experience and items by virtual sweatshops in developing countries.

Now the game Project Entropia has gone one step further. Following a similar model to Second Life, the game can be downloaded and played for free, but you can only experience certain aspects of the game by spending online currency, and the easiest way of doing this is to purchase credits and online property with "real" money. People have spent up to $100,000 US Dollars (USD) for online property. The game allows advertising and selling of real world services, such as videos and music. But what makes Project Entropia different is that you can now obtain a cashcard to withdraw your online credit and spend it in real life! With the exchange rate running at 10 Project Entropia Dollars (PEDs) to 1 USD, this has real economic value. The game gives something called a PED card, which in theory can be used at ATMs around the world.

I would like to see details of the credit agreement. I have noticed that Mindark (the makers of the game) is a Swedish company, and that their end-user agreement is subject to Swedish law. Will Mindark have to apply to be considered an electronic money institution according to European Law?


Anonymous said...

Although PE has been around for some time - maybe a couple of years or more? - the concept of real world economy isn't quite enough to take the game in to the "mainstream" of MMORPG culture. The game isn't particularly enjoyable to play. If it was a game in its own right, it wouldn't have survived quite as long I think, and for many of the players I have spoken to, that negates the lure of r/w riches. I really do like the idea of playing a game that legitimises the existence of buying and selling virtual cash, (if only to stick one finger up to the likes of IGE and the ebayers) but only if the game itself is still enjoyable.

Maybe they've updated the engine along with the current PR campaign, so I'll dust off my old account, patch the old client and see if they have. But if I'm still faced with the same terrible avatar control system, the awful HuD, and the most depressing SFX i've heard in recent years, then I'm logging right back out again and I'll continue to earn a living the old fashioned way.

Anonymous said...

mmm, I have played for 12months now and have seen a transition from some % return to a negatable level of return for cold hard cash input.
In it self its a great chat and campaign model for those who seek this as I have done!
On the whole I have inputed many $USD with and much skill gained and some excitement!
The latest VU upgrades and expansions of sales to China and Brazil.... well the thrill no longer exists, it seems to have started to suck loot rather nastily I add.
There is no competitor in this league for MA at this stage for and as said there is a vastly dimishing loot pile for the committed to support this VU and its rationales of expansion; it would seem that way when I look at my figures of return!
It comes down to they better pull the finger out as vast numbers within the game are threatening to pull the pin.... there is only a short lag b4 they move from contemplation to action!