Virtual Real Estate Sold for $330,000 in Entropia Universe

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It's one thing to buy a piece of pricey real estate and hope to earn some passive income on it by renting it out to others -- it's an otherwordly thing to buy a plot of expensive virtual estate and hope to do the same thing.

Yet this is what Erik Novak, otherwise known as "Buzz 'Erik' Lightyear," is attempting to do with the Crystal Palace Space Station, which he recently purchased for $330,000 on Planet Calypso in Entropia Universe. Though it may seem absurd, this kind of big-time virtual transaction is far from something new and in financial terms, it actually might not be such a terrible idea.

Entropia Universe is a popular massively multiplayer online role-playing game (MMORPG) that boasts more than 800,000 players from all over the world. It was created and is maintained by First Planet Company, a subsidiary of MindArk Group, based in Sweden.

The Crystal Palace Space Station, a popular destination for "hunters" in the game, was put on auction on Dec. 14 and was sold on Dec. 28 for 3.3 million PED (Project Entropia Dollars, which have a 10:1 ratio with U.S. dollars) to Novak, who beat out "Zachrum 'Deathifier' Emegen, known to the real world as David Storey, a PhD student at the University of Sydney who won Planet Calypso's first auction in 2004. Storey paid $26,500 to take ownership of Treasure Island and, according to a press release, earned back all the money he invested within 12 months.

"This is a stunning investment opportunity, and I have complete faith I will recover what I spent relatively quickly," Novak said in the press release.

In 2005, Jon "NEVERDIE" Jacobs won an auction for a virtual space resort for $100,000, which earned him a place in the Guinness Book of World Records in 2008. He turned the resort into Club NEVERDIE, which has earned him $50,000 in the first five months alone and was valued at $1.5 million in 2006.

The Swedish government has approved a license for Entropia Universe to act as a real bank, which explains how virtual money in the game can be exchanged for real dollars, and vice versa.

Novak's purchase is now dubbed as "The Most Expensive Virtual Object" ever. He'll be able to charge for use of his new property and will have the power to choose his own tax rate for transactions that happen in Crystal Palace.

It could take up to five years for Novak to make all that money back, according to experts.

BBC recently reported that virtual goods account for about $5 billion in sales in Asia right now, and the U.S. could reach that mark in the next five years.
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