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Many of the early transactions occurred on eBay. A seller might auction a magical suit of armor, say, just as they 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 $2,266, 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 on eBay and other auction sites.
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 with the way people were making money in EverQuest, Jacobs thought its economy 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 upon a magazine article about a new game called Project Entropia, which would later be renamed Entropia Universe. Developed by MindArk, a small Swedish company, Entropia implemented what Jacobs had dreamed about: an in-game, real-cash economy that was not only condoned by the developers but encouraged. Players, who could deposit U.S. dollars in exchange for Project Entropia Dollars, had the potential to make real money inside the game and even to start a business. At the time, Entropia was in its testing phase. Jacobs signed up to be one of the early adopters.
Remembers Jacobs: "I thought, 'This is it. This is what will change how everyone views video gaming. '"
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 animals 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, potion-like items that can be used 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 an arduous if not impossible task. Since a $20 investment in the game 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 buy 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 try to mine the virtual land to unearth valuable minerals. But it's important for players to keep in mind that everything costs PED: Hunting can get expensive because ammunition costs money, just as in real life. Mining can be even more costly because the valuable equipment degrades quickly when used, also just as in real life.
Sound complicated? It is. And that's the point. Entropia's economy is designed to be as dynamic as our own, and so tasks that would require money in real life also cost hard-earned PED in Entropia.
"Since its concept stage sometime in 1995, Entropia Universe was developed with the real-world economy as a fundamental base," explains MindArk Chief Executive Officer Jan Welter Timkrans.
In other words, in Entropia, it's a money-making free-for-all. There are arms dealers who try to buy weapons low and sell them high at auction. Real estate speculators buy apartments, which can fetch prices in excess of $200, and then try to sell them later for profit. Craftsmen design furniture that is purchased in the game to decorate no joke players' apartments. Clothiers sew custom-made clothing that can be purchased by players and worn by their avatars, since style is as important in Entropia as it is on South Beach.
In early 2003, Entropia was moved from its testing phase and launched commercially for anyone to download and play. 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.