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King_Ghidra
17-06-2005, 11:39:35
Interesting article:
http://blogs.guardian.co.uk/games/archives/2005/06/16/26500_virtual_property_owner_speaks.html#more

Late last year, David "Deathifier" Storey made headlines when he purchased a bit of digital land in the online game Project Entropia for $26,500. Gosh that's a lot of cash for something that some would argue doesn't actually exist.

I interviewed Deathifier for today's Online article on the current state of virtual trade in Massively Multiplayer Games and the complete transcript is below. In it he discusses the process which led him to drop such a bundle on a bit of virtual rock and how it's changed his perspective on ownership in the real world.

The Higgelhoff
17-06-2005, 12:12:24
Link is blocked, any chance of a cut+paste?

King_Ghidra
17-06-2005, 13:14:29
As requested:

Late last year, David "Deathifier" Storey made headlines when he purchased a bit of digital land in the online game Project Entropia for $26,500. Gosh that's a lot of cash for something that some would argue doesn't actually exist.

I interviewed Deathifier for today's Online article on the current state of virtual trade in Massively Multiplayer Games and the complete transcript is below. In it he discusses the process which led him to drop such a bundle on a bit of virtual rock and how it's changed his perspective on ownership in the real world.

What led you to decide to invest in a virtual world? Did you have to make any conceptual leaps to validate such a purchase?
In one sense it was a natural extension of my participation in Project Entropia as I'd been in the virtual world for over a year and a half when [the sale of the virtual property] was announced and in that time experienced much of the lifestyle of PE and its economy - how it grows, how it changes, how people react. When Treasure Island was announced I like most others thought, "Wow this is cool, and look at what you can do, what it offers" and, given that in the virtual world I knew I was not rich enough to bid for it, left things at that.

The real turning point or moment of inspiration came around 2 months before the auction itself after further information was known about the land and taxation. At this moment I realised with some external backing I could actually own this island.

Once I'd completed some preliminary analysis it was not hard to validate the purchase from a financial point of view and, since I'd already been around for so long and was not expecting to be leaving anytime soon, I had no trouble making such a large purchase.

How did your loved ones react?
Extremely supportive overall; my parents are intelligent and forward-thinking and could understand both the concept of Project Entropia, the potential (and risk) in the purchase and are quite interested how everything is turning out.

How did you get the money and how does this fit in with the rest of your life?
I approached some investors I knew with the idea and my initial analysis. After some discussion and further investigation we reached an agreement.

As for it fitting in with life, well Project Entropia and management of the island has settled in something akin to a part-time job alongside my PhD studies. So it fits in quite well, though it has a tendency like most forms of entertainment to draw away just a little too much extra time.

Who did you give the money to?
The money was deposited into Project Entropia through the official transfer process, giving me PED (PE's currency) with which I bid on the Island when the time came. Once I had won the auction system automatically transferred the Island deed to me, and the money to MindArk's appointed representative in the virtual world.

Explain why such a purchase was an investment and what you have done with it.
Well the island has two forms of income, one is estate sales, which is where the big money is in terms of one-off income and I currently have 20 of these (out of 60) that I intend to sell (10 are sold already, and the others will be on sale shortly). When you look at the price for such an estate (between USD$450 and USD$550) and multiply it by 60 you can see that it easily meets the initial purchase price of the island.

Even if they don't all sell at such a price, taxation will make up the difference and is also the source of ongoing income beyond the estates. Taxation is based on people carrying out activities on the island (hunting monsters or mining for resources) and in early May a Land Management System was added, giving me a fairly large degree of control over various sections of the island and what lives there. It's been off to a slow start however once everything is up and running the expected income is quite nice indeed.

How well has your investment returned?
Financially approximately USD$9,000 to date and we've really only just begun with the estate sales and land management, so there is still much untapped potential just in those two areas.

Aside from the financials there are intangibles such as the fame and recognition that came with the purchase in the virtual world, and the experience dealing with the various aspects of operations of the island, some of which mirror issues faced by real companies (advertising, resource acquisition, even law enforcement).

Overall the investors and myself are quite happy with progress so far, and we are still on track for full recovery and onto profit by mid next-year.

Do you feel your dramatic purchase was a challenge to perceptions of real-world economies and trade or do you think it was simply part of the game?
Well at first I thought it was just business as usual within the virtual world. I figured I'd buy it then follow through with my plans - sell the houses as they were made available, manage the land so it draws in other participants and in a year or two when the purchase price was recovered move onto the next 'big thing' to occur.

That outlook was turned on its head after the purchase as the news spread around the real world and I read peoples comments and comparisons to other investments it dawned on me that whereas the purchase of the island for PED was business as usual within Project Entropia it was quite an unusual investment to the rest of the world.

I do believe the purchase has challenged people's perceptions and blurred the border between the real and virtual worlds somewhat, and I also believe that this will be reinforced once we have demonstrated that it actually works - that you can in fact invest into and make money from Project Entropia, with its virtual world and real cash economy.

Is the in-game property comparable with any offline property you own? How is it different?
Since I don't own any beautiful islands or grand mansions, or indeed any other property yet there are no direct comparisons to be made.

There has, however been the expected comparison of investing in real estate by many and to compare the real vs. virtual there you have firstly the initial price - a real house in Australia is anything from AUD$300,000 to AUD$500,000 for middle class areas. You need to either live in, or rent out the house, you can't sell off parts of it and you don't get any ongoing income from it - just ongoing costs. Buying your own island requires millions and comes with an enormous range of issues just to get started...

So there are similarities on the surface, but dramatic differences in price, operations and return on investment.

What have you learned in offline life through this online investment?
Oh, many things. First and foremost has been how to effectively communicate with people, and how to do so when several of them are talking to you at once (imagine trying to conduct 4 or 5 phone calls at once) - there is definitely an art to it and it makes for some rather entertaining situations. There have also been learning experiences with the islands management. I have records of financials, land status, estates and issues under investigation to keep, planning the Islands operations for the future to ensure it remains an enjoyable place to go about your activities, actually carrying out those plans which include procurement of raw materials and conducting sometimes extensive business with others.

For someone whose life previously dealt only with computer science and the predictable behaviour of a machine it has been quite an eye opener to be involved in public relations and become a landlord, tour guide, travel agent and salesmen all on top of my standard professions in Project Entropia of small-time hunter and manufacturer!

Overall the experience has been extremely beneficial, and much of it will translate into the real world to my research and the future.

The Higgelhoff
17-06-2005, 13:31:41
Very interesting.

He states he is looking to make profit in 12 months or so. It's a big risk as to whether people will still be interested in the game in 12 months, especially if it comes from on-going taxation.

I have about 500 worth of assetts in Anarchy Online, a game that I haven't played in over a year. It's value is decreasing though as new levels are added and new equipment is introduced.

Provost Harrison
20-06-2005, 18:59:24
Sad geek...

The Higgelhoff
21-06-2005, 19:39:13
I don't think he's a geek. MMORPG's can give you the best gaming experiences around. If you can make money and have fun at the same time, then you are one of life's wiser men :p

BigGameHunter
21-06-2005, 22:20:50
WTF are you people talking about? Someone paid 26 large for a virtual chunk of real estate????!!!!????

Hell, I've got an entire multi-dimensional universe in my hall closet! It's full of three-titted nymphos and everything is made of beef jerky and the finest sipping whiskey.
The bidding starts at 5 bucks, US, real.

MDA
22-06-2005, 13:30:54
Well, at least the only resources he's wasting are electrons.

Resource Consumer
05-07-2005, 12:00:40
I can smell Tulip bulbs

Shining1
05-07-2005, 13:18:34
He's gonna be very sorry when the game turns out to be shit.

Oerdin
11-07-2005, 01:12:34
Originally posted by The Higgelhoff
Very interesting.

He states he is looking to make profit in 12 months or so. It's a big risk as to whether people will still be interested in the game in 12 months, especially if it comes from on-going taxation.

I have about 500 worth of assetts in Anarchy Online, a game that I haven't played in over a year. It's value is decreasing though as new levels are added and new equipment is introduced.

I'd have to agree. Most games last less then 12 months so spending big real money on a in game asset just doesn't make sense.

Oerdin
11-07-2005, 01:14:48
Originally posted by Resource Consumer
I can smell Tulip bulbs

Except the tulps would actually make pretty flowers. This won't even do that.

JM^3
11-07-2005, 01:50:28
Originally posted by The Higgelhoff
Very interesting.

He states he is looking to make profit in 12 months or so. It's a big risk as to whether people will still be interested in the game in 12 months, especially if it comes from on-going taxation.

I have about 500 worth of assetts in Anarchy Online, a game that I haven't played in over a year. It's value is decreasing though as new levels are added and new equipment is introduced.

you never played AI?

AI changed a lot of the weapons people use

at high levels, many soldiers use pistols now..

JM

Sir Penguin
11-07-2005, 02:59:02
Originally posted by Oerdin
I'd have to agree. Most games last less then 12 months so spending big real money on a in game asset just doesn't make sense.
I believe I first played Project Entropia about 3 or 4 years ago.

SP

Funko
10-11-2005, 11:24:38
http://news.bbc.co.uk/1/hi/technology/4421496.stm

He's made his money back.

Nav
10-11-2005, 11:35:00
Maybe I should buy a house (read: island) there. I'm squeezed out of the property market IRL....

MattHiggs
10-11-2005, 12:50:04
I've sure made some money out of it ;)

HelloKitty
10-11-2005, 16:48:25
Yeah, that guy just broke even a little while ago. The new storyu out is the looney who spent 100kUSD to buy a space station in the game.

I fooled around a little with the game a couple years ago. Very shallow gameplay but if you spend 10 bucks a month (just like a regular game fee) you cna do ok.

HelloKitty
10-11-2005, 16:59:58
There is the 100k link

http://www.cnn.com/2005/TECH/biztech/11/10/virtual.real.estate.ap/index.html

King_Ghidra
10-11-2005, 17:13:40
sorry kitty, even gary was waaaay head of you on this one

http://www.counterglow.com/forum/showthread.php?s=&threadid=31341

Funko
10-11-2005, 17:15:31
Yeah... but the space station was reported back in october and breaking even only reported now by the BBC? So er.

:confused: