Austin, Texas (KXAN) — Buying real estate is a big investment, but some people invest in virtual properties.
Justin Reed Says He Paid $18,000 Off The Coast Of Khorum, A Piece Of Virtual Land In The Entropia Universean online virtual reality game.
“I know it sounds like a lot, and it’s crazy to tell someone that, you know, I’m a virtual landowner, and I’ve put my savings into it. But I believe in Entropia,” said Reed, whose avatar name is David Joker.
That’s because Reed has been playing the game for nearly 20 years. Along the way, he cashed out $5,000 from the game to pay for his studies.
Now he hopes to recoup this investment in virtual land within four years.
“I get income based on everything a player finds out there. If they start doing their mining, I get 3% tax revenue on that. And that’s how I get my income,” he explains.
He said he pays $60 a year to keep animals on his land, but no land tax.
“It’s not like I bought a business or a property and all of a sudden the taxes and the value of the property go up, and I can’t afford it,” Reed said. “I will always own Khorum Coast, and all it will ever cost me is $60 a month for my creatures.”
Entropia calls itself the world’s longest running metaverse. It was launched in 2003.
“If you like the risk and are willing to gamble, which is basically what’s happening in this digital world, you know it’s a good place to gamble,” said Paul Toprac, associate director of Game Development and Design Program at the University of Texas at Austin.
Toprac said these kinds of worlds get bigger as more companies buy in.
That could mean more non-gamers playing on all platforms, like Entropia. Or it could mean that more people are drawn to the recognizable names, like Meta, formerly Facebook.
“Well, Meta is coming up with their thing, and Apple is coming up with their thing and Microsoft. And now the same users are all going to migrate to these other platforms, in which case you’re going to have very few people who can play in this space,” Toprac explained.
He said that eventually we will probably see virtual reality and reality mesh even more. But he advises starting small when investing in the metaverse.
Reed has made about $1,200 since he invested in late March.
“How often do you start a business and make money almost immediately in your first month?” he said.
He admits it was nerve-wracking at first, but he still thinks he made the right choice.
“I would say anything can be a bad investment. I could have started a bakery with my money, and no one could have bought my bakery rolls,” he said. “It just makes me feel like I have more control.”
Reed eventually hopes that money from the metaverse will allow him to retire from his retail job.
“I mean, as long as this game doesn’t eventually go under and get kaput, I’ll always, always have my country and I’ll never be unemployed for the rest of my life,” he said.
Toprac reminds people that they still have to claim income from the virtual world with the IRS. That means once you cash in your virtual money for real money, you will be taxed.