Mindark Enters The Virtual Orbit

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After the hype surrounding Second Life—and the subsequent backlash, encapsulated in an August Wired article detailing "How Madison Avenue Is Wasting Millions on a Deserted Second Life"—marketers might be understandably wary about the next big virtual world. Still, Swedish company MindArk is betting that its Entropia Universe (EU) platform has what it takes to attract big clients. In fact, it has already attracted the biggest client of them all, the People's Republic of China, which plans to launch its own virtual planet on the Entropia platform by the end of 2008. Right now, EU is tiny compared to Second Life—the former has 700,000 registered accounts, while the latter has close to 13 million (fewer than a million of which have logged in the previous 30 days)—but "Planet China" could change all that. Beijing's Cyber Recreation Development Corp., which is developing an office park devoted to all things IT in the hopes of attracting international investment, plans to build a virtual environment capable of supporting a staggering seven million concurrent users. Second Life, by comparison, has rarely registered more than 50,000 simulataneous log-ins. According to MindArk's head of marketing Frank Campbell, EU's distinguishing characteristic is its "real cash economy." The in-world currency, the PED, is tied to the U.S. dollar (10 PED=1USD), and users can easily transfer funds in and out of the virtual universe. Last year, Mindark auctioned off five licenses to operate banks within EU for a total of $404,000. It's this mix of e-commerce, social networking, and World of Warcraft-style gameplay that MindArk hopes will make EU the next big thing—and carry it through an IPO, which it announced late last year.

As for whether or not marketers will invest in yet another virtual world, Campbell compares the current situation to the Internet bubble. "When the Internet first came, everybody was jumping on it because it was hot and you could feel the potential in it without actually knowing how you were going to pull the best out of it," he says. "I think it was a bit like that with what happened with Second Life last year. They didn't have a real solid business model of where the customers were going to come from, how income was going to be generated, and so forth. It wasn't fully thought through."

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