Entropia Universe Housing Bubble? Man Pays $335,000 for a Virtual Property

(Nov. 18) -- Still reeling from the collapse of the housing sector, real estate prices across the United States are struggling to mount a comeback. As it turns out, however, the cost of virtual houses may still be on their way up, with some even selling for more than their real-world cousins.

Last year, an investor named Erik Novak broke the record for the largest single expenditure in a virtual world, paying $330,000 for a space station in Project Entropia, an online science fiction world where the economy for laser rifles and body armor ultimately comes down to U.S. dollars. But now a group of investors has set a new record, operating in the same game, paying $635,000 for Entropia mogul Jon Jacobs' "Club Neverdie." More than half of that, $335,000, came from a single investor.

Yan Panasjuk, a 35-year-old Russian software engineer living in Boston, is attempting to realize a curious version of the American dream worlds away from a white picket fence. He explained to Forbes why he made such a giant gamble out of his own pocket:

When motion pictures were first invented there were a lot of critics saying that it is a novelty act and it would never amount to anything nor will be able to make any real money once the novelty wears off -- last time i checked Avatar has grossed 2.7 billion dollars world wide. Most recent example is MTV and Internet but then you know those stories well enough. 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.

There is real money to be made in Entropia's cash-based economy. The club's previous owner was earning $200,000 a year by taxing every virtual transaction that occurs within the confines of the game space. Panasjuk and the other investors hope to be able to start turning a profit with similar numbers.

But like the real housing market, virtual investors rely on the smooth operation of a complicated system to turn their profits, and they're making a big bet hoping that their virtual economy will look the same in a few years as it does now.

One thing's for sure, Panasjuk is no hands-off investor. He aims to quit his job as a software engineer and make Entropia his full-time job/life.

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