SMALL PRINT:THE COUNTRY is paying a high price for our collective splurge on bricks and mortar, but while the resultant ghost estates, phantom hotels and skeletal office blocks sound vaguely incorporeal, at least you can go and see them. And all those unfortunate people in negative equity do, at the very least, have a roof over their heads.
A US “property” investor, however, doesn’t have even that consolation, despite spending a whopping $335,000 (€245,000) on his latest purchase. That’s because the property Yan Panasjuk purchased, part of a vast complex including seven bio-domes, a stadium, club and obligatory shopping mall, exists only in the massive multiplayer online game Entropia Universe. Yes, he put down more than 300 grand essentially for a bunch of pixels. It’s more than likely the largest virtual property transaction ever. And it’s very possibly a sign of the future.
Panasjuk, a 35-year-old software engineer from Boston, bought the property from virtual entrepreneur Jon “Neverdie” Jacobs, who made a jaw-dropping $635,000 when he sold his Entropia portfolio of virtual properties two weeks ago.
In an e-mail exchange with Forbes magazine, Panasjuk explained his investment: “Virtual universe is the next logical step in world entertainment and although there are a lot of critics and people shaking heads, it is here to stay and take its ranks among the greats.”
Panasjuk’s purchase is the clearest example yet of how real world economies and the virtual economies of games such as Entropia, World of Warcraft and Second Life overlap – the phenomenon of so-called Chinese “goldminers” playing these games for hours on end to earn in-game currency to sell for real-world currency is well-documented, and Facebook hopes to generate big profits from the virtual cattle of Farmville.
But worlds such as Entropia aren’t subject to real-world financial or planning regulation, and Panasjuk might find it difficult to insure his purchase against the sort of risks that might only occur in the game – if Entropia’s owners shut it down, for instance.
Still, cynics might suggest investments such as Panasjuk’s are no less real than the opaque financial instruments that brought the international financial system to its knees. Caveat emptor indeed.
