Megabyte Millionaire

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It's the big day. Jon Jacobs is rushing around his office in his Spanish-style house in the Design District. A 39-year-old with dirty-blond hair and a British accent, he's checking the settings on four computers in the front room of his home. They are all connected to the online virtual-reality game Entropia Universe. Each computer controls a character — called an avatar — in the game.

There's one for Jacobs. Another for Jacobs's fiancée, Cheri London. A third for his six-year-old son, Taliesin. And yet another for Kenneth E. Claus, a nondenominational reverend from Homestead.

"This is going to be the world's first dual real-world/virtual-reality wedding," Jacobs says excitedly as he paces around in jeans and a black button-down shirt.


Jon Jacobs

London hears the comment and smiles supportively. A striking, slender black woman, she fixes her makeup in front of the mirror while continuing to adjust her wedding dress — a noose-tight white leather one-piece that ends five inches above her knees.

"I will say this about Jon, my future husband," London comments. "He has a way of making life" — she takes a long pause for effect — "very, very interesting."

"Darling," Jacobs says as he enters the hallway, near the bathroom, "you look beautiful!"

Sure, London knows this is a strange way to be married. But she also knows her soon-to-be husband — a former independent filmmaker whose obsession with online videogames seems limitless — would have it no other way. That's because this ceremony, both real and pixilated, is going to be more than a simple I-do, I-do wedding. It will be a grand publicity stunt. Jacobs is hoping hundreds of people who play Entropia Universe will attend the wedding — virtually.

And that would be a coup for him, because Jacobs — known as "NeverDie" in the game — is doing more than getting hitched inside a computer landscape. He's getting married inside his own virtual nightclub, Club NeverDie, which is located on an asteroid in Entropia Universe for which Jacobs paid a reported $100,000 in October. Yes, that's real U.S. currency for a space rock that exists only in a videogame.

Jacobs holds the record for the most valuable piece of virtual real estate, and claims he will soon make millions from his investment. He just needs to draw people in, like any other business, and an over-the-top publicity stunt like a virtual wedding is sure to bring in publicity and potential customers.

On this June day, Reverend Claus, a slim 60-year-old man wearing a priest collar, will conduct the ceremony as he holds a microphone. His words will be carried into the game for people virtually attending the wedding to hear. But there's a glitch: Either the game's servers or one of Jacobs's two Internet connections — a DSL line and Comcast cable service — is acting irritably. As Jacobs rushes around the room, checking settings and rebooting some of the computers, Reverend Claus sits down at one of the machines, marveling at the messages coming from well-wishers.

Claus yells out, "Listen to some of the countries they're from here: Poland, Australia, Hungary, United Kingdom, Sweden, Slovakia, and Finland!"

Finally about 4:25 p.m. on this sunny afternoon, the wedding begins. Jacobs and London stand next to each other in front of Claus. The floor is lined with power cords and CAT-5 cables. "Let us begin," Claus says. "Dearly beloved, we have gathered together in the presence of God...."

Jacobs looks to his side and notices that one of the computers has been booted out of the game. He leaves his bride, clicks the mouse a few times, and then returns to her side, offering a wry smile. Claus looks perplexed but continues the service.

"Now, Cheri, we are not only gathered here but with several hundred throughout the virtual world," the reverend says. "We ask you here and there, will you have Jon to be your husband to live together in marriage?"

London leans in to the microphone. "Yes, here in reality, and yes, here in virtual reality," she says as Jacobs notices a problem with one of the other computers. He dashes across the room to try to fix it.

"Jon, will you have Cheri to live together in marriage?... And you can't get away with answering that question by hopping over to fix this thing. Come over and answer this now."

Jacobs steps over, grabs London by the hand, and leans into the microphone. "In reality and in virtual reality, I do," he says.

They're now married here and in the computer-generated world of Entropia, where roughly 100 avatars have gathered at Club NeverDie.

While his marriage today is a huge step in his personal life, the ceremony is also a marketing event. Jacobs has big plans for Club NeverDie, and if he can realize them, he could become the first millionaire of virtual reality. He's invested time and money in Entropia Universe, which has an in-game economy linked seamlessly to our own. One U.S. dollar is worth ten Project Entropia Dollars (PED), the game's currency. Money can be put in and pulled out of the game with a credit card and the click of a mouse.

Thanks to his $100,000 investment, Jacobs claims to be generating more than $10,000 per month in revenue through taxes, real estate sales, and event tickets — all transacted exclusively in Entropia.

But some people who study virtual economies question the legitimacy of Jacobs's claims of six-figure investments and big returns. Others ask the obvious: How safe is it to invest real-world money in a virtual world absent of real-world laws?

Jacobs rebukes the criticism. He'll prove everyone wrong, he says. They simply don't see the potential of this new economy — a potential he asserts will make him a virtual property mogul, a digital Donald Trump, a megabyte millionaire.

"People are barely figuring out what's possible here," Jacobs says in a loud voice as he navigates his avatar through Entropia. "This is fucking significant, man."

Jon Jacobs always knew he wanted to be a star. In fact early in his life, he felt destined for celebrity. "Some people just feel like they're going to go out and be a star," he says.

Jacobs was born in Derbyshire, England, in 1966, and raised in London, the son of a beauty queen and a banker. The family lived on posh Cavendish Avenue, and Jacobs's childhood neighborhood likely had a lot to do with his longing for notoriety. According to a story Jacobs loves to tell — it's also included in his Internet Movie Database bio — he lived a few doors down from Paul and Linda McCartney. The attention the McCartneys generated fascinated him.

"I used to walk down the street, and the little Japanese fans would come up to me," he claims. "They knew I lived on the street, so they'd ask, öIs Paul around? Is Paul around?'"

"Let me see," he would reply, as if he knew the pop star. The ten-year-old Jacobs would run to his house, into the back yard, and jump over several walled gardens to reach the back of the McCartneys' house. He'd peak in the windows, jump back over to his house, and talk to the Japanese fans.

"No, sorry," Jacobs reports he would often have to say. "Paul's not home."

He enjoyed the charms of an upper-middle-class life in England as he studied drama at the Sylvia Young Theatre School. By his early twenties, despite trying to produce a couple of shoestring films in London, Jacobs had yet to reach acting success. So he did what every aspiring actor still does: He moved to California, arriving in September 1991 at age 24.

During the next few years, he made two movies — The Girl with the Hungry Eyes, a vampire horror flick based on a Fritz Leiber short story and set amid Miami's Art Deco buildings and Welcome Says the Angel, an erotic thriller in which he costarred with Rutger Hauer's daughter Aysha.

The Girl with the Hungry Eyes received lukewarm reviews, but Welcome Says the Angel was lauded. "The wonder of this $17,000 feature is that it compares more favorably with the much-praised Leaving Las Vegas than you would imagine," the Los Angeles Times wrote.

Despite the work, Jacobs couldn't carve out a decent living. He earned peanuts for The Girl with the Hungry Eyes and acted in Welcome Says the Angel for free.

By the mid-Nineties, Jacobs was ready to give up on making it in Tinseltown. "I had directed a movie, starred in a movie, and I couldn't get a job at a video store," he complains.

Jacobs moved to New Orleans and wrote what he believed would be his magnum opus, Lucinda's Spell, a screenplay about a prostitute-witch in New Orleans who needs to win back her orphaned son. He scraped together the financing and produced the movie, releasing it in September 1999. The New York Times described the film as a "deliberately vulgar, often offensive tale suitable for insecure teenage boys. The witches' conversations are like some fantasy of Beavis and Butt-head's about how women talk among themselves." Of Jacobs, The Times said he "has some on-screen appeal — somewhere between an aging rock star and a celebrity hairdresser — but he's a little too much in love with himself."

By then, having directed five films and acted in fifteen others without even the scent of commercial success, Jacobs decided to make another change: He moved to Miami and, with the help of a friend, purchased a house in the Design District for $195,000 in April 2002. His Hawaiian-born girlfriend, Tina Leiu, moved in with him. They had a young boy together named Taliesin. Jacobs began working on a new movie, Hey DJ, about a South Beach disc jockey inspired by old Elvis Presley songs.

At the same time, Jacobs began to rekindle a longtime hobby: videogames. After a couple of years of playing Ultima Online — an Internet-based game in which thousands of people play with and against each other, known as a massively multiplayer online role-playing game, or MMORPG — Jacobs discovered EverQuest. Often referred to as "EverCrack" for its addictive quality, EverQuest became a popular MMORPG after its release in the spring of 1999. Players inhabit a Tolkienesque fantasyland known as Norrath, where they battle monsters and interact with other gamers, collecting powerful weapons and greater skills. Because EverQuest players must spend weeks to acquire needed weapons and skills, a black-market economy sprung up. People began to sell, for real-world money, in-game items such as swords and potions.

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.

Then the bidding began. Jacobs figured he had enough money to hold off any other buyer. But he was wrong. On December 14, 2004, MindArk announced the Treasure Island auction had been won by an Australian named Zachurm "Deathifier" Emegen, who paid a reported $26,500 for the land, a record price for virtual real estate.

Land ownership in Entropia is a prickly subject, because a legal system does not exist to mediate disputes, and MindArk retains control of everything, no matter how much money a player invests in the game. What's more, land values can fluctuate more greatly than in the real world. In Entropia, unlike in the real world, land can literally be created by the developers.

Whether disputes over virtual real estate can be settled in real-world courts is still a legal unknown. Only one such case has been filed. In February 2002, BlackSnow Interactive sued Mythic Entertainment after the developer announced it would shut down the game Dark Age of Camelot, making virtual items related to the game worthless. BlackSnow Interactive ultimately dropped the case.

That lawsuit exemplifies the risk of investing in virtual real estate and items, says Richard A. Bartle, a London-based game developer who studies virtual economies. "If you buy things in a game like Second Life, and the company announces that they're going to close the game down, you're in trouble because you can't get your money back," he says.

After Jacobs lost the bid to buy Treasure Island, his personal life crumbled. His girlfriend Leiu had been suffering from a flu that wouldn't go away. One morning, she couldn't get out of bed. "She was in great shape, but she was lying there in bed complaining about her throat," Jacobs says. "The next thing I know, she says, öI can't breathe.'"

He rushed her to the hospital. Leiu was diagnosed with myocarditis, an inflammation of the heart. His ill girlfriend found temporary freedom in Entropia. Island Girl was her avatar's name.

"I'd get up in the morning, and she'd be up already, hunting," he says. One time he noticed her at the computer. Jokingly, Jacobs began to sing: "My girl's a gamer chick, and oh I love her so." For fun they recorded the song and sent it to MindArk, which included it in Entropia's in-game jukeboxes. The song made NeverDie something of a virtual pop star.

But Leiu wasn't improving. "I kept noticing weird shit, like hiccups," he says. "She'd get hiccups all the time."

They saw a doctor again in January 2005. She's not going to die, the doctor said. "A month later, she was dead," Jacobs recalls. "Somehow, whatever it did, it got her. She was 39."

Leiu had become a popular player in Entropia. To commemorate her, MindArk created a small piece of land called Memorial Island and erected a shrine. When players visit the commemorative, serene music plays. A picture of Island Girl is on one of the walls. A plaque reads, "This shrine is dedicated to the loving memory of Tina Leiu, öIsland Girl,' the ultimate virtual warrior."

As he visits the shrine on a recent afternoon, Jacobs looks down and touches his chin gently. "This is the only thing of its kind," he says. "This is really the first-ever virtual gravesite. We played Entropia enough for this to have more meaning to me than if there were a grave."

A few months after Leiu died, Jacobs met Cheri London, a regular performer at The Forge in Miami Beach. He hadn't expected to meet anyone so soon after Leiu's death, but there was something about London. "She was perfect," Jacobs recalls.

At the time, Hey DJ had been shot and was in the editing process. That left plenty of time for Jacobs to play Entropia again. And his timing couldn't have been better. MindArk announced the sale of an entire asteroid with twenty "bio-domes" for hunting and mining, a nightclub and disco, a large arena, 1000 individual apartments, and docking stations.

The official story goes that Jacobs refinanced his Miami house — and public records back up this claim — and pulled out about $100,000 in equity. MindArk then held an auction for the property in October 2005, with only Zachurm "Deathifier" Emegen — the Australian who had purchased Treasure Island one year earlier — and Jacobs vying for the virtual real estate. After three days, the auction ended. Jacobs won. The final bid: one million PED, or $100,000.

The record-setting sale quickly made news on the Internet. Jacobs still bristles with pride when he remembers logging on to the BBC's Website to see the headline: "Virtual Club to Rock Pop Culture."

Jacobs named the asteroid Club NeverDie and announced an ambitious plan to bring in world-renowned DJs to stream live music inside the club.

But allegations quickly followed that Jacobs was an insider who had benefited from a fixed auction. Two months after the sale, in December 2005, an Entropia gamer who goes by the name "Francine" found something curious and posted it to the Entropia forum: Jacobs had registered the Web address clubneverdie.com ten days before the auction ended. "There is something really fishy here," Francine wrote. One hundred thirty-six posts followed from gamers demanding an answer from Jacobs.

He did answer, telling the other gamers it was just prudent planning: "I was ready to pounce [on the auction], and while you all were busy hunting and crafting, I was refinancing, I was plotting, I was buying Web domains, I was telling everybody in the dance scene that I was going to start a virtual night club and I would want them to spin there."

And now, for $100,000, he was the proud owner of an asteroid orbiting in a sky that existed only in the algorithms of personal computers.

Jacobs claims that Club NeverDie, officially opened for business in early 2006, is a profitable enterprise. He has sold some of the 1000 apartments, and he collects a 5.5 percent tax on all hunting and mining in the bio-domes. He also runs monthly dance parties and hunting competitions, where players can win shopping sprees at Club NeverDie's mall, which includes stores run by other players.

Jacobs advertises those events just like he would a party on South Beach: He employs promoters to sell tickets who then collect a cut. His main in-game contractor is Lynette Firn, a 59-year-old psychology professor at Hillsborough Community College in Tampa. Known in the game as "MindStar 9," Firn has become Jacobs's in-game handler and marketing director.

"Entropia was the first time I played in a virtual world, and I was hooked from day one," Firn remembers.

Firn preferred avatar-to-avatar interactions — the "human" relationships — over hunting and mining. Jacobs realized that Firn understood the entrepreneurial potential of Entropia and hired her to help him promote Club NeverDie. She's become the club's official reporter — writing regular articles for the online forums that chronicle the club's events.

Firn admits her gig with Club NeverDie can sometimes feel like work — she has pressures, deadlines, and stress — but it's an oversimplification to think of playing Entropia as a second job, she says. "There's also that fun element," Firn explains. "I'm able to use my in-real-life skills and abilities that I've transferred into the virtual world."

Jacobs flips through a small notebook next to his desk. It's his handwritten ledger: apartments sold, taxes collected. He's averaging 100,000 PED, or about $10,000, in monthly revenue. In a year, he says, his investment will have paid for itself. It's conceivable, Jacobs claims, that he could one day be virtual reality's first millionaire.

"I've got 1000 apartments," he explains. "It's a pretty good revenue stream. They sell for about $100. That's $100,000. But what I'm doing is rationing them onto the market. This is the history of Entropia: Everything goes up. If I put all of my apartments on the market today with a starting bid of, let's say, $10, maybe I'd sell all of them within a week at an average of $50. Next year they will be trading those same apartments for $250, $300."

There are critics. In May, Dan Hunter, a law professor at the University of Pennsylvania, penned a lengthy entry about Entropia for Terra Nova (terranova.blogs.com), a blog that covers developments in virtual economies. Hunter discovered that in September 2004 Jacobs had attended a technology and gaming conference in California called Digital Hollywood. According to a short bio published on the conference's Website, Jacobs "is a famous and high-profile Entropia U.S. spokesperson."

"So it turns out that the ösale' of Space Station 'NeverDie' was from MindArk to, um, one of their marketing and PR people," Hunter wrote.

Today Jacobs denies he was employed by or received special treatment from MindArk. He listed himself as a spokesman for the company to have an opportunity to promote the game. "I had the opportunity to speak, so I said, öSure, I'll come speak,'" Jacobs says.

"Jon Jacobs is not and never has been an employee of our company," explains Jan Welter Timkrans, MindArk's chief executive. "Many participants/members from our community represent us at various venues around the world because they believe in the potential and impact of Entropia Universe."

MindArk has even e-mailed University of Pennsylvania administrators alleging that Hunter is "spreading slander" about Entropia.

Contacted at his office, Hunter declined to comment about the row. "I don't want to fan the flames," he says.

Edward Castranova, the Indiana University professor who analyzed EverQuest's economy, told New Times through a university spokesman: "The claims made by MindArk and Jon Jacobs are wildly exaggerated."

Responds Jacobs: "It's very frustrating when these claims are made by people who are trying to make the masses understand what's going on."

A few days after the wedding, Jacobs is content. More parcels of land have recently sold in Entropia, fetching as much as $15,000 each. His movie, Hey DJ, has been released and has made the rounds to select theaters in the United States and Europe. Junior Jack delivered a guest performance in Entropia on June 25, streaming into Club NeverDie as if he were spinning at a local club. More and more people are paying 40 PED — the cost to be transported from Calypso to Jacobs's asteroid — to visit Club NeverDie.

He's walking his avatar, NeverDie, through the club. In Entropia, avatars are designed by the players and can be thin or fat, pale- or dark-skinned, bald or hairy. NeverDie is a tall, white-skinned avatar with short brown hair who wears a purple hat and a purple-and-black coat that hangs to his ankles. Inside the club, Jacobs has decorated the walls with real-world photos of the two women of his life, Leiu and London. There's also some truth to the New York Times film review that criticized Jacobs for being "a little too much in love with himself."

Jacobs directs his avatar in front of a large screen inside Club NeverDie. On the screen is a picture of Jacobs from Hey DJ sporting Elvis-like sideburns. The avatar stands in front of the man, like the puppet before the puppeteer.

"This is the future," Jacobs says.

Suddenly three people send messages to Jacobs at once. Someone has been inside Club NeverDie killing other players. In Entropia, avatars can die and are re-created without losing any items. The person isn't doing any lasting damage. He's just being annoying or, as Jacobs puts it, "a fucking idiot."

Jacobs brushes off the incident. But 30 minutes later, it spirals out of control. A player who was killed in Club NeverDie paid to place an advertisement in the game-wide bulletin system: "Ubers (high-level players) kill people in bio-domes. Don't waste 40 PED."

Jacobs, frustrated, throws his hands in the air and slams them down on the desk.

"You get idiots doing this: He comes up here. Somebody kills him, so he uses the advertising system to try to damage the business," Jacobs says. "The same thing happens in real life. I could be running a club, somebody gets stabbed, and then the papers are saying, 'Don't go to Club Space.' I've got the same problem. At least here, no one really got hurt."

Jacobs spends the rest of the afternoon talking to the players and posting messages on the forums. It's work.

This isn't a game. It's a business.

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