Investments in real estate can be a powerful tool for generating wealth, but one central Texas man who invested his life savings into a virtual property is generating wealth in his own unique way.
Justin Reed, a resident of central Texas, purchased the “Khorum Coast,” a virtual plot of land in the Entropia Universe. Entropia launched in 2003 and calls itself the world’s longest-running metaverse.
“I put in $18,000,” said Reed. “I know it sounds like a lot, and it’s a crazy thing to tell someone that I’m a virtual landowner, and I put my life savings into it, but I believe in Entropia,”
Reed’s virtual plot of land generates revenue based on how other Entropia players interact with his land. This might include a 3% tax revenue if a user starts mining on Reed’s property. Reed has a minimal fixed expense to keep animals stocked on his land.
“I will always own Khorum Coast, and all it’ll ever cost me is $60 a month for my creatures,” said Reed. “I would say anything can be a bad investment… with this, I just feel that I have more control.”
Reed, who has already made $1,200 since investing in March, advises starting small when investing in the Metaverse.
“I mean, as long as this game doesn’t eventually go under and go kaput, I will always, always have my land, and I will never be unemployed the rest of my life,” he said.
Virtual reality and metaverse projects are still in their infancy and considered highly risky. Still, Paul Toprac, a Game Development and Design Program associate director at the University of Texas at Austin, believes we are likely to see an even greater mesh between virtual reality and reality in the coming years with more companies buying in.
“If you like the risk, and you’re willing to gamble, which is basically what’s happening in this digital world, you know, it’s a good place for gambling.”
Entropia is likely to experience intense competition as recognizable names like Meta, Apple, Microsoft, and GameStop begin releasing their versions of the Metaverse.
These platforms will create their own space, and these same users who play Entropia will migrate to these other platforms, in which case, you’ll have fewer people playing in this space, said Toprac.
Toprac reminds people they still have to claim earnings from the virtual world to the IRS. That means players get taxed once they cash in their virtual money for real money.
