Slashdot Mirror
Virtual Property Investor Recoups Investment
afaik_ianal writes "Remember that guy who bought a virtual island in "Project Entropia" for £13,700? Well BBC is reporting that that he has managed to make his money back in under a year. According to the article, 'He made money by selling land to build virtual homes as well as taxing other gamers to hunt or mine on the island.'"
"When (your stupidity) dealt you a lemon, you make lemonade"
Hmm...I can see it now. Yes Mr Bank Manager...I'd like a loan to buy an island. Where is it? Well...it's virtual...
that either this guy is incredibly smart and the people who bought into his virtual property are incredibly stupid, or that he's incredibly stupid and everyone who bought into his virtual property is... well, still incredibly stupid.
-barton
http://games.slashdot.org/comments.pl?sid=132758&c id=11084873
/. story :)
One of the many similar comments on the older
Virtual Property, eh? Not at all like domain names, right?
Online "property" has as much value as people are willing to pay for it. This is why we spend thousands of dollars on shiny rocks and metals (to say nothing of the diamond cartel). This is also why we hold onto generally worthless items because of sentimental value. (I had my Chuck Taylor All-Stars for years after they were too worn out to wear).
So I'm not surprised that this guy is making money. He found something that he expected people would want, and snatched it up so he could be the one to sell it to 'em.
All we are is walkon extras in someone else's sim. Reboot yourself!
--
make install -not war
Perhaps he should build a pyramid with the money he has made from this scheme?
Spending big money does seem silly, but spending a few bucks here and there for a virtual subdivision is perhaps not (eg. a $20 gift to that game-nut pal). What this guy has done is create a service whereby he can onsell his asset at a low price point. Not really that stupid after all.
Engineering is the art of compromise.
Holy freedom Batman! Why can't real life be like that? I guess that's why we have games.
Ironic: http://games.slashdot.org/comments.pl?sid=132758&c id=11084873
HJ
Now they can create another virtual island that's even sweeter and sell it for even more money.
copy virtual_island1 virtual_island2
print money
Not a bad deal for the island-buyer either, as long as they've determined the risks, ie. the game's subscriber base withering away.
So this guy's time and effort are worthless, then? That's not to mention what else he could have done with that money (money market account, CD, etc.).
If anybody missed this opportunity, I have a bridge to sell in Brooklyn, New York. You keep 100% of the toll revenue of thousands of cars daily. Cash only please.
Virtual investments recoup you!
Virtually.
Obviously this guy understood capitalism and the history of the United States. The US was able to become very profitable because it took land from the Native Americans and did something unheard of to the indigenous poeple; put a value on land.
Whoever makes a claim to that land is now able to make money by selling parts of it, and collecting revenues and rent from the use of the land. This will definitely enrich the land owner as long he has the threat of force to enforce his terms.
And nobody better be touching my still out in back....
I don't want knowledge. I want certainty. - Law, David Bowie
Ahem, this first post land is currently owned by CmdrTaco
You must pay rent to use this space.
Forward funds to his account immediately or you will be evicted.
liqbase
I assume this is a capital gain. I'd love to see the IRS, or Inland Revenue (they don't say what country the gamer lives in) have a field day with this. It would make a funny court case!
Project Entropia's fundamental idea is that everything in game has a real-world value. You begin the game with nothing; and must purchase in-game items with real money. Items you use to harvest resources, kill monsters, or any other activity which generates saleable objects in the system decay over time. You give Project Entropia money to buy objects in game, that money flows into MindArk. When you sell an object and withdraw real life cash, that money flows away from MindArk.
Given that, the Project Entropia system cannot generate rewards greater than the amount of money fed into the system, minus however much MindArk takes off the top.
You are using a virtual tool that decays, purchased with real money, attempting to generate a positive income in a system already rigged to prevent such a scenario on average. Your tool will break, and you will buy another one, in the hopes of getting that big payoff. It's a gambling system dressed in some livelier colors.
This got me to think a bit, how is this any different from buying an over priced pair of shoes? or a nice car that costs $250k USD? Or a diamond necklace that is not truly rare at all? It's an idea that is being sold, and idea that this particular exchange has value. Market value, someone is willing to pay.
I personally don't see the need or even want in this but it's not my money..
and you have "made your money back" instantaneously!
This guy may have beaten the interest rate on a CD, but a CD doesn't require hundreds of hours of micromanaging, either.
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everyone thinks they know everything, as long as they are behind a computer. i just scanned the old article and ran across this!
R.I.P.
It would be interesting to find out how much time he spent selling his sub-divisions or enforcing his taxes. If this took the equivalent of a full time job or a lot of time, he hasn't necessarily made any money back, just earned a small wage as well as loosing part of his initial investment in the sales.
All this time I thought playing video games was about having fun and getting a high score!
Ah, the greater fool theory of investment in action. "No matter how much I pay for this, a greater fool than I will pay even more."
Or several greater fools, in this case.
think about this for a second. This guy invested $13000 and made it back in a year. So after a year or so he has not gained any profit. In a year you could have a job making $13000 profit. Sure maybe next year he'll have made 13000, but this is just breaking even. No big deal.
Basically what you're saying is that this guy worked his a&& off for weeks or months coding this thing before he even brought it on line, and then worked his a&& off managing it for a year. If he's only made $13,000, assuming a 6 month development period, he's been working for a whopping $4.16 per hour.
Wal-Mart checkers and McDonald's burger flippers make better money.
2 cents,
Queen B
HDGary secures my bank
Everyone always told me to invest in land, because "they're not making any more of it!"
Little did everyone know....
What if I do the same thing, and I do get different results?
Reminds me of the time I bought into the slashdot IPO.
I haven't read the terms of use of this MMORPG, but I wonder what guarantees these buyers have that the game sysadmins won't decide to create another virtual island and sell it to someone else, devaluing the pre-existing virtual properties? When central banks see times getting tough, the temptation to just print money has proved irresistible in the past.
"Lack of technical competence coupled with the arrogance of power, as usual, leads to no good end."
This guy bought a space station, and wants to make it a disco. And it only cost him a cool $100 grand.
I swear I hit "preview". Here's the link
So he managed to regain his investment, but what could he have made with his time and money if spent elsewhere. In a CD the money would have easily been earning 5% annually and could have potentially returned much more if put into more risky investments. More importantly what could he have earned if he spent his time working at some other occupation instead of hyping his real estate? You can easily earn over £13,700 working a real job in a year. Opportunity costs are the name to the game here.
Project Entropia? It takes guts to make up something that sounds like a paradise of entrails. I guess "The Intestinet" was already taken.
From the "Project Entropia Conditions of Use":
As part of your interactions with the System, you may acquire, create, design, or modify Virtual items, but you agree that you will not gain any ownership interest whatsoever in any Virtual item, and you hereby assign to MindArk all of your rights, title and interest in any such Virtual item.
From the sound of it, the user doesn't own anything... I wish I could sell nothing for $100,000.
Jon Jakobs just bought the virtual space station for $100G, he's going to turn it into a cross between Jurassic Park and a disco.
As Dave Barry is so fond of saying, I am not making this up.
"Win treats sysadmins better than users. Mac treats users better than sysadmins. Linux treats everyone like sysadmins."
I've got some "virtual property" to sell you! I'm giving you a chance to invest early, too, because the property is so exclusive that right now it exists only in my own mind! Strike while the iron is hot! And, I'm willing to let you have it at BARGAIN BASEMENT prices! Checks and credit cards accepted.
Advertising the virtual land when they sell other real estate that devalues his? Will he put Google adwords billboards on the land? How about branded game items? I hear JCB is doing a great deal on virtual backhoes. . But I guess at the end of the day buying virtual land is no different to buying virtual music like mp3s.
I am a free slashdotter. I will not be modded, blogged, DRM'd, patented, podcasted or RFID'd. My life is my own.
i guess he made his money back, must be a popular game, with alot of people that dont get laid playing it to the extent that they would actually "pay" to do anything on a game?? lol
I don't agree with your analogy at all, especially comparing it to a CD. What's hard to say is how much of the initial investment was "resold" and how much of the the earnings were from taxes and fees that he's collected. If 100% of his earnings came by reselling property, then I'd agree this was a pretty poor investment. It's like buy $26k of stock and reselling the stock for $26k a year later. Practically no earnings.
However, if only 50% of his earnings came from reselling property, and the other 50% came from taxes and fees he's charging people, then I'd say he fared quite well. That means he still has 50% of virtual property left (or even more, depending on how he much he's reselling property for) and it also means for a 50% return on his investment. Tell me another investment that'll give you 50% return in just 1 year. And this 50% return will probably carry year over year.
HD Trailers
What kind of help would you like?
Some people are saying "the people in the game paying for space on the island are incredibly stupid", but I say bravo to all of them; he paid a lot of money for the opportunity to create something other people would enjoy, and in so doing added enough value to make his money back (and presumably a profit).
Many have scoffed that this individual paid good money for nothing tangible, and then sold it on to others who also got nothing tangible. This is neither innovative nor new. The currency or futures/options trading markets have been doing this for years. The stock exchange companies even make a cut of each trade---a profit from the intangible profits made from trading virtual or as-yet-non-existant goods.
Patent litigation: A doctrine of Mutually Assured Destruction... in which everyone seems willing to push the button
Not so. The domain name space is stricly limited. But there is an unlimited supply of virtual reality. Therefore: It's just a pyramid scheme in disguise.
Let's add up the total value of the money he has brought in and the value of what he currently owns, subtract off what he paid, and then divide by the number of hours he spent managing this whole business.
I am sure we are talking nickels and dimes.
FTA While the real housing market may be somewhat static, the one in the virtual world is booming, said the space station action winner, gamer Jon Jacobs, AKA Neverdie. I want to be an action winner, what do I do?
http://playmoney.blogs.com/blog/2005/11/informatio n_and.html
PowerLevel.com - A next generation marketplace for virtual items and services
There really needs to be a massive overhaul of the patents issue. Realistically many science institutions in third world countries dont pay the licensing fees anyway for the use of the information. The real effect is that it stifles many science projects in the first world and the countries like india and china are catching up or overtaking the first world and its all because the greed in the first world is horrific.
This is the latest form of chain pyramid money making scam. If you bought into this you are the perfect dumbass that the developers want. 100,000 coconut carving monkeys, only 10 gets to taste the coco. GOOD LUCK!
Land is a very special kind of thing--good, useful land is in strictly limited supply, and all other economic activity depends on it. It is a very real, very necessary thing that is expensive because the kind of land needed by each particular economic activity is quite scarce (for example, the particular strip of land needed to build a road, or fertile land to grow food)
This, however, is just some bits of code created by programmers working in an office somewhere. They can, and will, create almost infinitely more. It is not scarce except that it is artificially made scarce by programmers.
I think the confusion here comes from the fact that land is the metaphor being used here, when what is really for sale is a 'game object', which is the same as if I created a big online game of marbles, and I decided to make a few really pretty marbles, and then people who played the game started selling them to each other for lots of money. It is exactly the same, it's just something some programmer made and can make infinitely more of. And in this case it's called 'virtual property' or whatever, but it's no different.
And can you get Insurance on your Virtual Home ?
Would the insurance exclude "Acts of root" ?
D
http://davesboat.blogspot.com/
He went to bankok and bought a bj for $18000 but he made it back in under a year...
And I believe Gibson was recapitulating Barlow, who said cyberspace is where you are when you're on the phone.
Curator of the Jefferson Computer Museum http://www.threedee.com/jcm
This is dwarfed by the enjoyed by his enjoyment of the game, I hope, or he is really wasting his time.
No one but the poorest of the poor Chinese would attempt to do this as a way to make money.
only old people buy real property!
The economy cannot generate rewards greater than the amount of money in the system (money=natural resources), minus however much gets taken off the top (one-way conversions such as burning oil). You are using a tool that decays, in a system already rigged to prevent any net growth. Your tool will break, and you will buy another one, in the hopes of getting the big payoff. It's a gambling system dressed in some livelier colors.
Anyone that wants more info about this "Treasure Island" and about the guy that bought it should visit this site: http://www.twarriors.com/ti/. He currently makes about 50$ in taxes/day, and he gets them automaticly when people hunt/mine,... on his land ;)
50$/day=1500/month
Not bad for virtually no work.
Johnny: Mommy, when I grow up I want to be a virtual real estate tycoon and make lots of money!
Mom: Ok Johnny, but if you want to be successful you'll have to spend a lot of time playing your online games, and you might even need to skip some classes.
Johnny: I'm willing to make the sacrifices!
Sure, he bought a virtual island in cyberspace. But in the real world, he lives with a roommate in a U-Stor It room.
Similar to the upcoming US election results
After all this publicity they still only have 400,000 acounts.
While I agree that it's lengthy, the story is most definitely on topic...virtual markets, virtual values, the eventual crash. The moral is not limited to Project Entropia, however, but can be extrapolated into just about any Western style market...arbitrage, stocks, bonds, etc.
If I had the mod points, I'd call it Insightful.
When you think about it, what is it really that makes our "reality" something better than "virtual"? For all we know, we could just be A.I.'s in some simulation. It's not unreasonable to believe that computer power will continue to increase at the incredible rates they have until now. Wouldn't the ultimate game be populated by Artificial Intelligences whose only inputs and outputs are within the simulation itself, making it their reality? I have to admit, being a god in a realistic simulation is something I expect from games within my lifetime.
You have to wonder whether "Deathifier" is as intelligent as so many people on this website are suggesting, or whether he A) was one of the lucky ones or B)simply worked alot harder than the other people to sell his property. This second option makes alot of sense, and is supported by his commitment that was demonstrated by his willingness to make such a large investment. Could you imagine paying that much and NOT making it back?
However, if his goal was making money, then this probably was not a good (intelligent?) way to go. He worked for a year -in order to make his money back. Is there a guarantee he will see much more profit coming off of that? Not likely, given that he made his money by selling his land away. Overall, he could've done better flipping burgers for a few months.
13 700 British pounds = 23 816.08 U.S. dollars
Ease off his nuts already. Not only did he make a gutsy move a year ago, when (nearly) everyone slammed him for flushing his money - but now that he's proven it was a winning investment, he gets slammed again.
What everyone is failing to mention is that this land will continue to produce $20,000+ per year, which he can bank, or sell the deed to it for $50k or more.
That's $50,000 pure profit, from playing a game he obviously enjoys. The dude has a PhD - that's no coincidence.
Looks like there are more than a few suckers born every minute.
It is by the juice of the coffee bean that thoughts acquire speed, the teeth acquire stains. The stains become a warning
Is it really such a big leap from government selling you land and a company selling you a portion a memory. With a land purchase from a government you are entering a contract with them, the government can change its mind and take back the land, the government can fall and you land claim is null.
Now companies go under way more often then governments, but governments do go under, and land claims are invalidated. But it is similar.
But there is value in location. Would you rather live in ANWR or New York City?
Unless you can teleport easily. I haven't played the game.
You expect moderators to read anything except the subject????
If anyone asks you to explain why slashdot is now a steaming pile of crap instead of the hugely interesting site that it used to be, just point them at the moderators....
same as wikipedia territory stamping where a determined clueless loon will drive off a world reknowned expert in any given field, which, hypocritically, slashdotters will bemoan...
I think the goat story is brilliant for exactly the reasons you mention, you can apply it to so much of modern life, and the fact is mere substitution of "goats" for "entropia" or "stock market" should not be sufficient to make something eminently sensible suddenly seem eminently stupid, if it does then you need to seriously question the validity of the eminently sensible rationale.
http://slashdot.org/~GuyFawkes/journal
And, IIRC, the ATO has plenty of precedents for rulings that would apply here. It may be virtual property, but the time & effort he's put into it would probably be viewed as 'work', by which he 'earned' the income... in the same way as any other real estate you own. You pay tax on rent, you claim deductions for expenses, etc. Although I wouldn't think he'd have too many expenses - still, being able to put a deduction on your tax return for 'MMORPG monthly access fees' would be almost worth paying the extra tax! :-D
:-P
If he sells the entire island, I would think it would fall under the normal investment rules, where you pay tax on the capital gain.
The ATO can be surprisingly flexible when it comes to creative ways to take money off you...
Disclaimer: I might have no clue, so don't take my word on it!
I thought it clever and relevent to the topic/story.
Now help me get it out!!!
Get your Unix fortune now!