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Many of the early transactions occurred on eBay. A seller might auction a magical suit of armor, say, just as he would an MP3 player or a pair of jeans. Once the auction winner paid, the seller would arrange to meet and deliver the armor in the game. Despite objections from EverQuest's developer, Sony, an organic economy took root that used real-world money to pay for virtual items.
In January 2002, Edward Castranova now an associate professor of telecommunications at Indiana University completed a study of the so-called "EverQuest economy." He reviewed thousands of eBay transactions and calculated that players earned an average of $3.42 per hour while playing the game and that EverQuest's Norrath had a per-capita gross national product of $2266, comparable to that of Russia or Bulgaria. To exploit this economy, some entrepreneurs established virtual sweatshops the most notorious being BlackSnow Interactive in Tijuana, Mexico where laborers "farmed" items in the MMORPGs that were later sold for profit.
Today, on one Website that sells EverQuest items, a high-level weapon called an Adjutant's Saber sells for $192.50, and a piece of armor known as the Belt of Thunderous Auras goes for $140. That's real, hard-earned Benjamins in exchange for goods that, well, don't actually exist.
Though intrigued by the way people were making money in EverQuest, Jacobs thought it was limited. "The economy operates outside of the game," Jacobs says. "I began to see the potential: What if there was a game that had an economy inside it?"
And in late 2002, he discovered such a game.
Jacobs stumbled on a magazine article about a new game called Project Entropia. (It would be renamed Entropia Universe.) Developed by MindArk, a small Swedish company, it implemented what Jacobs had dreamed about: an in-game, real-cash economy that was encouraged by the developers. Players, who could deposit U.S. dollars in exchange for Project Entropia Dollars (PED), had the potential to make real money inside the game, and even start a business. At the time, Entropia was in its testing phase. Jacobs signed up to be one of the early players.
Remembers Jacobs: "I thought, This is it. This is what will change how everyone views videogaming. "
In Entropia, players are part of a new human colony on the planet Calypso in the distant future. They first arrive at Port Atlantis, a city on the western coast of one of the planet's two continents. Gamers have a first-person view of a three-dimensional world not unlike our own: The avatars, or people, vary greatly in size, body type, and appearance. Concrete cities dot a landscape filled with exotic flora and fauna.
Once inside the game which is free to download at www.entropiauniverse.com players have two options: invest real-world money to buy mining and hunting equipment or earn PED inside the game, cent by cent, by collecting "sweat" from roaming animals, called mobs, that can be sold to other players. The sweat can be used to create, among other things, potionlike items to increase a player's mental skills.
But, as in EverQuest, building enough "sweat" equity to buy the necessary equipment for a beginning player is arduous, if not impossible. Since $20 can save a player weeks of time in the beginning, most new players deposit at least that much. Exchanged into PED, that money can be used to purchase items directly from the game developers or from other players through in-game auctions or avatar-to-avatar transactions. Once equipped, players can hunt and kill mobs, some of which drop PED or other loot when killed. Or they can mine the virtual land to unearth valuable minerals.
It's important for players to keep in mind that everything costs PED: Ammunition costs money and mining equipment degrades quickly, just as in real life.
Sound complicated? It is. And that's the point. "Since its concept stage sometime in 1995, Entropia Universe was developed with the real-world economy as a fundamental base," explains MindArk chief executive Jan Welter Timkrans.
In other words, Entropia is a money-making free-for-all. There are arms dealers, real estate speculators who buy apartments for more than $200, even craftsmen who design furniture to decorate no joke players' virtual apartments. There's custom-made clothing too. Style is as important in Entropia as it is on South Beach.
In early 2003, Entropia was launched commercially. The developers claim that more than 450,000 accounts have been registered, but will not disclose the average number of players in the game at one time.
During the early stages of the game, Jacobs established his avatar, NeverDie, as one of the best known and most affluent. He had the best weapons, armor, and mining equipment. "I feel like NeverDie is the ultimate name for a gamer, because everybody dies," he explains. "If you play games, you die."
In December 2004, nearly two years after Entropia's commercial launch, MindArk made a surprising announcement. The company would auction off a "newly discovered" (translation: newly added) island. By owning this virtual real estate, a player could levy taxes on all hunting and mining done on the land collecting a small portion of proceeds and potentially making money as a land baron. Called Treasure Island, the land contained a castle. Jacobs hoped to turn the castle into a virtual nightclub and to promote the island as the game's premier hunting ground. He sold off everything he possessed in Entropia, including some of the game's rarest and most valuable items. He claims he raised 200,000 PED, or $20,000, from his items in the game.