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Wednesday, January 5

$26k for virtual real estate?

Listening to the radio in the shower, i hear this : http://www.radiofrance.fr/chaines/france-info/chroniques/hightech/ (That link is only going to be good for a little while) , which points me to this interview. WARNING : Both links in Froggy speech. The gist is, a 22-yr old Australian d00d called David Storey just spent $26k in real money to buy a virtual island, which he intends to develop and make a profit on. This takes place in Project Entropia a new virtual world with a real cash economy.You can buy PEDs (the local currency) at a fixed exchange rate of 10 to the old green back, and more importantly, you can change them back at any time. Project Entropia's Sayah King David didn't have the cash on hand, so he convinced some investors to lend him the money. I hope they're not the knee-busting kind? Here's what I'm worried about : a run on the bank of this pyramid scheme. Pyramid scheme? Heck, yeah! The only source of fresh money is what the players are bringing in, right? I mean, David can develop his "natural" ressources and his prime real estate all he wants, at the end of the day, I very much doubt the company behind the game has any intention to back the "value" generated with their money. So he's in the green as long as new players keep coming in and spending real world cash to pay rent on his condos. Run on the bank? Well, okay, there are investors like David that are tying up their PEDs for the long term, and there are, presumably, peons spending theirs on various goods and services, where, one assumes, they end up in the pockets of investors. Who re-invest and develop the econo.... wait a minute, no. They'll take the PEDs out of the economy for good by converting them to cold cash. At least there won't be any inflation. At any rate, if anything scares the investors (as opposed to the spenders), they'll run. The game is hacked, rumored to be hacked, or to contain a backdoor, etc...and they run. Bye bye PEDs. The whole thing rests on the idea that there will be more spenders than investors, and that more money will pour in than will pour out. I suppose it depends on how fun it is to be there, and what virtual life-style you get for your PEDs. After all, if you can have loads of virtual fun for 10 bucks a month, why the heck not. Pay for it by quitting cigarettes. Seems you can take that to a bank and get a $26k loan. "NO, Sharkey, NOT THE KNEECAPS!" Or is it worse than that, and the idea is that people will throw good money after bad and be unable to leave? Perhaps I'm missing something, since I don't have any education in economics? I wish David much luck, and if he turns a buck on this without it being a straight pyramid scheme (crash and burn when the rate at which new players arrive starts to flag), then i'll be the first to applaud. As I've said before, I'm not afraid of the whole virtual/reality conundrum. Perhaps I can open a little buddhist temple on David's island? Location : Beauvais, France

4 Insights :

Blogger Kitten intuited...

OMG...but don't you had thought of it first. Really people are morons.....

1/05/2005 05:21:00 PM  
Blogger Kitten intuited...

Can I link you, sweetie?
Just be forwarned....traffic will come your way...but they are all nice people..and always welcome a new and interesting blogger to the circle!!

let me know.

1/05/2005 06:12:00 PM  
Blogger wendy intuited...

I read a series called Otherland a few years ago by Tad Williams that involved a whole virtual world where people lived, had property, ect.

It's a little weird to realize that real people are actually living this way and investing money such concepts.

1/05/2005 06:14:00 PM  
Blogger Mathieu intuited...

Kitten : Bring it on! I like what I've seen following the links from your site, and I'd be honored to be in such company.

Wendy : Yeah, the interview is freaky in that sense. David says that he's been in this virtual world for two years, expects to stay another two (that's 10 grands a year!), and that the profit from his investment shouldn't really be enough to make a difference in the real world, but will allow him to live it up in the game.

Presumably because he has to pay off Sharkey...

1/05/2005 06:27:00 PM  

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