Tuesday, May 02, 2006

Another economic breakthrough

There is an article in the New York Times today (which I won't link to since it requires registration [just search google news], I will however link to MMORPG blog which also has the story and the BBC, which is a better news organization than NYT anyways) about another virtual world, in this case Project Entropia. Mindark, the Swedish developer has introduced a real world automated teller machine (ATM) card which allows players to access their in-game bank accounts through a real world banking machine (note that there will apparently be a transaction fee). Bingo!

Project Entropia is one of the only other virtual worlds that actively promotes the exchange of real world money for virtual dollars (and vice versa). In fact, I believe their entire business model is built around the idea of skimming the fat off the top since there is no subscription fee and no cost to download the client (unlike SL which requires you to pay a monthly fee in order to engage in higher economic functions like owning land). Since they stated that last year approximately $165 million was exchanged in PE, then 1.5% of that is approximately $2.5 million (that is if they take 1.5% off of every exchange, and that 1.5% is a flat rate). Many of the articles state that there are around 250 000 subscribes (although I cannot find any independent confirmation of those numbers, even on MMOG chart). So if PE generated $165 million for 250 000 in 2005, and SL generates approx $500 000 per week (or $2 million per month, or $24 million per year) for approx. 200 000 people (as of recently) then it sounds like PE has the better economy ($660 per resident per year vs. $120 per resident per year). I am not entirely sure of those numbers, so if someone has conflicting information, then please let me know.

PE was famous in the mainstream media for two other noteworthy events. One was an island that was bought ($27 000) by one of the players who sold/rented parts of it to residents, and another was a person who bought a space station ($100 000) and is also selling/renting parts of it as well as opening a nightclub. Apparently both are doing very well and have made their money back (at least the island has, and the space station sounds like it is well on its way).

I predict a number of things will happen in the future.

  1. more and more mainstream stories will pop up about virtual economies (boring)
  2. someone somewhere is going to get bitten hardcore, and lawsuits will quickly follow (who's responsible for making sure I get paid? what if I get ripped off?)
  3. SL or PE will be bought out by someone else (maybe Ruper Murdoch, maybe Yahoo or Google)
  4. this type of cash attracts big money like thrashing in the water attracts the sharks, watch out for some serious underhanded tactics (who regulates real world economies? can you get insurance?)
  5. you're going to get taxed (start a K street lobby group to make sure your congressman doesn't tax this economy booster!)

1 comment:

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