$100,000 Spent for Virtual Land

By Deane Barker on November 10, 2005

Man buys virtual space station for $100,000: Another crazy purchase in an MMORPG.

Jon Jacobs, a director of independent films, plans to call the space resort, in the science-fiction themed game Project Entropia, “Club Neverdie.” Like other land areas in the game that has been visited by 300,000 players, the resort grounds will spawn dinosaur-like monsters, which visitors can kill.

[…] Jacobs, 39, plans to hire famous disc jockeys to entertain visitors once a week or so at the resort but still reckons on netting $20,000 a month from the hunting tax and other income.

We reported on this same thing a year ago (in this same game), when someone paid $26,500 for another plot of land. In that post, we said this:

The downside is wrapped up in the law of supply and demand —

Demand in the “virtual economy” is fairly untested. In the real world, the value of land has held true for millions of years. Who knows if this trend of people wanting stuff in a fake universe is going to continue? The market could fall apart in an instant, whereas the real world land market is comparatively stable.

As for supply, this virtual land market is dependent on the “owners” of the game not destroying it by expanding the world. Land (or any other commodity) has value only because there’s a finite amount of it. If the producers of this world just decided to flip a switch and double the size of the world, thus flooding the virtual land market with other islands like this one, then this guy’s investment drops like a stone.

Still makes sense, in my mind.

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Comments

  1. Scary thing is that he mortgaged his house to buy this thing. I could never get such a deal past my wife!

    I think though that the value of this “property” has already been proven, as he thinks he’ll be netting a decent income from it. So it’s not just land, but developed property and a business with a track record that he’s buying. Still, it does take some cooperation from the game developers to ensure that not everybody can push a button to create competing businesses elsewhere in that universe.

    Of course, if there is one Club Neverdie that has been built and has been profitable, it’s likely that someone else will try to build a competing business, but I would imagine that would be developed over time with the same type of pressures you’d find in the real world.

  2. “We reported on this same thing a year ago (in this same game), when someone paid $26,500 for another plot of land.”

    This purchaser made his $26,000 back ingame in October :)

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