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$635,000 for a "virtual asteroid?" I'm answering your questions on Real Cash Economy Video Games

by Headfirst
13 replies
Hey fellow Warriors!

Many of you have read about Jon Jacobs recent $635,000 sale of the Club Neverdie Asteroid in the Entropia Universe game. I've seen few discussions about this and realized there is a lot of misinformation out there on Entropia and other Real Cash Economy video games.

I've had an interest in RCE games since 2002 and I've played many of them Entropia happens to be my favorite. I've been playing Entropia since 2006. Since then I started two in-game businesses and sold them for a profit and also founded (and later sold) a incentive site for players of RCE games.

There are tons of players (over 700,000) spending serious money inside the game and there are many opportunities for entrepreneurial minded individuals to make some money.

I've given thought to putting together a WSO but decided against it for now and will just share my experience and knowledge with my fellow warriors.

If you have any questions about Entropia or any other RCE (Real Cash Economy) video games you can ask them here. I'll be checking in on this thread regularly to answer questions for you.

In case you aren't familiar with Entropia, it is an MMORPG video game with a freely convertible currency that has a fixed exchange rate of 10 to the dollar.

This means that unlike most games you can take the currency (think gold in most games) and cash it out for US dollars. You can find or buy items in the game, sell them for a profit and take the money out. You can buy land and virtual real estate, sell and take the money out and so on.

If you've missed the headlines about this virtual world here are some of the larger ones that we've seen in the past few years. All prices listed are in US Dollars
  • Dec 2004 - Zach Emergen buys the Treasure Island estate for $26,000. Zach fully recoups his investment by Nov 2005.
  • Oct 2005 Jon Jacobs buys a virtual "astroid space station" for $100,000. He brands it as CLUB NEVERDIE and it generates $200,000 in revenue per year since.
  • 2006 - A Colorado high school student and his mother make $36,000 making and selling in-game weapons.
  • Dec 2009 - Entropia player Buzz Erik Lightyear buys the Crystal Palace space station property for $330,000
  • Nov 2010 - Jon Jacobs sells the CLUB NEVERDIE property to a group of buyers for $635,000

Throw your questions at me!
#$635 #answering #cash #economy #games #mmorpg #questions #rce games #real #video #virtual asteroid
  • Profile picture of the author Joshua Rigley
    Banned
    Awesome. I've been very interested in these kinds of games for a long time. I have a few questions:

    First, is this game CPU intensive like Second Life?
    Second, what are the most popular money-making methods in this game?
    Third, how would you recommend a newbie to the game get started making real money?

    Thanks for your time.
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    • Profile picture of the author Headfirst
      Originally Posted by Joshua Rigley View Post

      Awesome. I've been very interested in these kinds of games for a long time. I have a few questions:

      First, is this game CPU intensive like Second Life?
      Somewhat, it does require a bit more in the way of a graphics card though. I have a Radeon 4950HD card and I have to tone down some of the graphics settings a bit. The new graphics engine in the game uses crysis or crytek (I get the two confused) and its visually beautiful, but resource heavy.

      If you're not playing the game as a game but just buying or selling in-game you can probably do without top notch graphics.
      Second, what are the most popular money-making methods in this game?
      There are a ton of different methods to make money in game, all of the effective ones require some money though. The easiest for a non-gamer to get started with is trading. Almost all of the items in the game are made by other players and in order to make these items they need resources. These resources are also collected by players.

      The easiest way to get started is to buy resources at a discount from players that collect them (miners, gatherers) and then sell large quantities of resources to players that need them for crafting items. You can find some info on the markup prices of various resources at MyTwoPecs

      I have a friend to took this one step further and group the resources in the most commonly needed quantities and put them in a shop he bought in the game. In the shops you can display your wares and other players can purchase them at any time whether you are logged in or not.

      All of the shops in the game were bought some time ago, so the only way to acquire one now is to purchase it from an existing owner. With the economy lagging IRL (in real life) many of the in-game shop keepers are selling their stores to cash out some money. You can find quite a few bargains.

      Third, how would you recommend a newbie to the game get started making real money?

      Thanks for your time.
      That's really going to depend on how much time and money you want to put into it. The resources shop I mentioned above made a few hundred dollars a week net for my friend and for some, that's real money.

      On the other hand for others real money might involve buying a large piece of valuable land and collecting taxes from hunters and miners that are using the land.

      Its all going to depend on time and money. MindArk likes to advertise that the game is free to play, and it is, but the free route is tedious and boring. I tried building up for free and lasted about 15 minutes before pulling out the credit card and buying some gear.

      If monetary investment isn't as much of a concern as time, you can purchase items and real estate and wait for them to appreciate and sell. I know a few players that bought tons of Condos in game for around 350PED ($35 apiece) and later sold them for 500 - 800 PED ($50-$80 each) Not a huge return, but one that doesnt involve a ton of time.

      You can also trade in liquidations. From time to time a player will decide to quit or decide to give up the game. In those cases you can often get everything they have at a steep discount for the convenience of buying it all. Then you can sell the items, skills and properties individually on the ingame auction or through player-to-player trades.
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      • Profile picture of the author Defunct
        Can you really make money in this game without grinding it out too much?

        I played WoW for a year off and on and rocked the auction house on 3 different servers, i still have like 100000k gold laying on those account, i automated a lot of it.

        How's the economy in this game? Is it fun? Likely to last?
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        • Profile picture of the author Headfirst
          Originally Posted by Defunct View Post

          Can you really make money in this game without grinding it out too much?

          I played WoW for a year off and on and rocked the auction house on 3 different servers, i still have like 100000k gold laying on those account, i automated a lot of it.

          How's the economy in this game? Is it fun? Likely to last?
          The biggest difference between something like WoW and Entropia is that everything in Entropia can be bought and sold without violating the terms of the game.

          Don't want to spend months leveling your character? Buy the skills from someone who's selling. How much will that cost? Only the market knows. If you have more people buying skills than selling they get expensive. When the reverse is true they get cheap.

          What can you do with that WoW gold you have laying on those accounts? Will they wire it to your bank account? Can you withdraw it from an ATM? That's the attraction of RCE games to me.

          Everything has a price. Instead of charging admission like most games, the RCE games turn it into a service and make their money off the rake. They take a % of everything that happens in the game and let you add and remove funds as needed.
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        • Profile picture of the author Headfirst
          Originally Posted by Defunct View Post

          How's the economy in this game? Is it fun? Likely to last?
          It's pretty stable. They structured the game in an interesting way. The parent company is MindArk. They run the game infrastructure and are registered as a bank in Sweden.

          The planets are owned by different companies. The main planet Calypso is owned and run by a company called First Planet Corp which is a spin-off of MindArk.

          The other planet that is currently running right now is called Rocktropia and is a licensed joint venture between the guy that just sold the astroid, Lemmy from MotorHead and I think there are some other business people involved.

          There are multiple other planets that are supposed to be coming online soon (or so the rumors go) including one run by a large Dubai construction firm, one by a Chinese firm and another that is apparently a Michael Jackson related world (that sounds the scariest of all to me)

          I think, and this is just speculation on my part, that by having each planet run by different companies it limits the risk of the whole system falling. One company and planet could go under but you could just move your operations to another.

          Unlike SecondLife, the currency doesn't float. In SL the price of the currency is determined by market prices and fluctuates daily. In EU its a fixed exchange that is pegged at 10 to the dollar.

          The prices in-game fluctuate and they do mimic the fluctuations of real world markets but they aren't drastic. I've never seen a complete crash of an item or commodity in the game.
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  • Profile picture of the author abnation
    Is farming still as popular as ever?
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  • Profile picture of the author Sweetcheeks12354
    I think this is a great way to learn business for a huge reduced rate. Also having played the game myself, it's a lot easier to make money with this than Second Life. When you allow players the ability to do anything, then things aren't worth anything anymore.

    Think of it in WoW terms. Grind 7 months to get Tier 10 gear, or pay someone $300 for it. I know a lot of people want to do it the traditional way, but there is a huge audience who just wants to kill Horde (GO ALLIANCE!) and not worry about grinding.
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  • Profile picture of the author Terry Hatfield
    So how does one pay taxes from the profits that they make from the game?

    It seems to me, that you could buy and sell and trade items in the game tax free, grow it up to a huge amount and then cash out of the game and pay taxes in real life.

    How are the profits tax in real life? Do you take the amount of ped you had at the beginning of the year and subtract it from whatever you have at the end to determine what you pay taxes on?

    Or can you leave your ped in game and grow it indefinitely, and only pay taxes a few years down the line when you cash out?
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    • Profile picture of the author Headfirst
      Originally Posted by Terry Hatfield View Post

      So how does one pay taxes from the profits that they make from the game?

      It seems to me, that you could buy and sell and trade items in the game tax free, grow it up to a huge amount and then cash out of the game and pay taxes in real life.

      How are the profits tax in real life? Do you take the amount of ped you had at the beginning of the year and subtract it from whatever you have at the end to determine what you pay taxes on?

      Or can you leave your ped in game and grow it indefinitely, and only pay taxes a few years down the line when you cash out?
      Taxes would depend on your country of residence. I would recommend talking to an accountant for that answer.
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  • Profile picture of the author Headfirst
    Originally Posted by Chris Kent View Post

    I think a WSO showing how to quickly get to grips with this game would definitely sell. Even better would be a guide showing how to make money in it, but I have no idea if you have had any long term success at that?
    I did all right long term, but it was never my source of income. I had the most success with websites relating to the game, but didn't do to bad in the game for a guy that wasn't trying to make a business out of it.

    I sold my crafting business (skills, materials, stock) for a small profit to another player. Later I did the same with my mining skills and a mining equipment.
    It sounds to me like a zero sum game, financially? Is that right? Of course, I'm ignoring the owner's fees in this.

    I mean, is there inflation? Do some things like property, for example, outperform other in-game assets? What controls the price of things? Is it pure demand and supply? Is there even taxation within the game?
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  • Profile picture of the author Sweetcheeks12354
    Yeah, it seems that 90% of the players would have to lose money at this, which is what happens in any market really. What is the GDP in US dollars?
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