Complicated publicity stunt or new economic model? As previously reported, there is growing economic importance in virtual worlds and MMORPGs. Players make virtual money from selling loot and goods within game. The in-game economics can be complex and involve all sorts of new assumptions about value, and warrant studies on the phenomenon.
The next logical step for the growing online economy is to make a jump from virtual value into the real markets. Online players can acquire goods and currency from the game, and then these goods can be converted into “real” money via auction sites or specialised sellers. There is enough of a market that it has prompted “farming” of experience and items by virtual sweatshops in developing countries.
Now the game Project Entropia has gone one step further. Following a similar model to Second Life, the game can be downloaded and played for free, but you can only experience certain aspects of the game by spending online currency, and the easiest way of doing this is to purchase credits and online property with “real” money. People have spent up to $100,000 US Dollars (USD) for online property. The game allows advertising and selling of real world services, such as videos and music. But what makes Project Entropia different is that you can now obtain a cashcard to withdraw your online credit and spend it in real life! With the exchange rate running at 10 Project Entropia Dollars (PEDs) to 1 USD, this has real economic value. The game gives something called a PED card, which in theory can be used at ATMs around the world.
I would like to see details of the credit agreement. I have noticed that Mindark (the makers of the game) is a Swedish company, and that their end-user agreement is subject to Swedish law. Will Mindark have to apply to be considered an electronic money institution according to European Law?