The world's most expensive island online

Twenty-seven year old in Australia paid $26,500 for a virtual island considered 'most valuable virtual object' by Guinness

What is the most you're willing to pay for a virtual item in a videogame or virtual world? Five, ten dollars? How about $26,500?
That's the amount David Storey, a 27-year-old graduate student living in Sydney, Australia, paid for a virtual island, the "Most valuable object that is virtual," according to Guinness World Records.

It's easy to write off Storey, who goes by the name "Deathifier," as a geek gone wild, but he now owns a million-dollar empire.

Storey runs Amethera Treasure Island, which he purchased in the virtual world Entropia, as a rare game preserve and taxes hunters on his land.

Storey says the taxes bring in more than $100,000 in real money per year.

"I thought it would be cool to own an island, and I knew I could run it and be able to pay for my play" says Storey, who has picked up skills he never imagined learning in a game. "Entropia continually evolves, so you have to constantly be watching for new developments. It's sort of like real life."

While Storey's example is extreme, buying and selling virtual goods in videogames and virtual worlds is becoming mainstream.

The virtual goods market in the US is estimated to reach $1.6 billion this year, up from $1 billion in 2009, according to research firm Inside Networks.

And the US is just a part of the worldwide market, which some experts put as high as $10 billion; countries like China and Korea are major players.

Virtual worlds and massively multiplayer online role-playing games (MMORPGs) like Entropia and Second Life are where virtual goods economies began.

But in recent years, casual and social games like "FarmVille" and "Pet Society" on Facebook have also become important players.

Typically, virtual transactions can be divided into two categories. In one type of transaction, you "cash in," or exchange real dollars for virtual currencies, and use the virtual currencies to buy virtual goods, like a new cow in FarmVille.

The other type of transaction lets you cash in and, like Storey, earn real money. In addition, virtual worlds and MMORPGs have also gotten very good at monetising the user; industry experts estimate that the average revenues per user usually range from $10 to $20.

In comparison, social and casual games are relatively newer, less mature markets that usually only utilize "cash in" transactions.

A fairly successful social game might have average revenues per user of a dollar or two. Still, Inside Virtual Goods estimates that sales from social games will make up more than half the total US virtual goods revenues in 2010.

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