Insanity? Virtual space station auctioned off for $330,000 in real money

Sold: One virtual space station for $330,000 in real money. It may sound insane, but the buyers and sellers here clearly believe there’s gold in the virtual world of Planet Calypso.

The virtual space station was built by The First Planet Company, a part of MindArk, a Swedish online virtual world maker that operates the Project Entropia Universe, which includes Planet Calypso. A player going by the name of Buzz “Erik” Lightyear paid 3.3 million Project Entropia Dollars for the Crystal Palace, a fully functional space station. Project Entropia Dollars can be exchanged for real money at an exchange rate of 10 to 1.

The purchase isn’t without precedent, as noted by Fatfoogoo’s blog. In 2004, David Storey paid $26,500 for a plot of undeveloped land in Project Entropia. And in 2005, Jon Jacobs spent $100,000 on a virtual night club inside Project Entropia. There’s some real investor speculation going on here, backed by real money. We’ve noted that MindArk’s central bank has been officially sanctioned by the government of Sweden.

The 10-year-old Entropia platform has been developed over the past decade at a cost of $40 million. It was launched in 2003. The Planet Calypso world within the universe has been generating a profit since 2004 and has more than 820,000 registered users in 200 countries. The user-to-user transactions within Entropia Universe exceeded $420 million in 2008.

This may be another indicator of the rise of the virtual goods business model, where players play an online game for free but pay for the digital objects inside it. Players can buy and sell goods inside the worlds, giving them a chance to make real money. Hence, Lightyear’s purchase might not look so crazy a few years from now, if the Project Entropia Universe continues to grow. Lightyear, if he so chooses, can operate a business on the space station, which is depicted in the video below ...

via Insanity? Virtual space station auctioned off for $330,000 in real money | VentureBeat.

Related

Virtual goods such as weapons or digital bottles of champagne traded in the US could be worth up to $5bn in the next five years, experts predict.

In Asia, sales are already around the $5bn mark and rapidly growing.

For many, virtual goods are one of the hottest trends in technology and are fuelling huge growth in the social gaming sector.

"This is just an exploding part of the gaming business right now, said venture capitalist Jeremy Liew.

"It is the most exciting area in gaming," he said.

Mr Liew, whose firm Lightspeed Venture Partners has invested $10m in virtual goods companies, said the rapid growth of the sector was unprecedented.

"We have seen companies go from nothing in the last 18-24 months to tens and hundreds of millions of dollars in revenue." ...

Playfish's Mr Sarris said that is the main reason people are willing to purchase products that do not exist.

"The way we look at it is it's no different from paying money to go and see a movie or rent a dvd. What you are paying for is the experience and that notion of entertainment." ...

Central to the early growth of this virtual goods revolution have been social networks like Facebook, MySpace and Bebo.

Users of these networks can also pay for virtual goods, such as digital birthday cards, champagne or flowers.

"Increasingly as people's relationships migrate online, your interactions occur there," said Lightspeed's Mr Liew.

"That makes it more natural for those acknowledgements of how important someone is to us to occur there also. Buying something like virtual champagne or a birthday card is telling someone they are important to you." ...