ntropia Universe, a massive multiplayer online role-playing game, wanted to do something different for its players: let them withdraw in-game money as real-world dollars.

In May of 2006, the game's developer, MindArk, announced a new ATM card to make it happen. But the scheme, however revolutionary, was short-lived.

Instead of paying a subscription fee, Entropia players bought in-game currency, called Project Entropia Dollars, which can be spent to buy in-game items like weapons or clothing. MindArk sold 10 PEDs for a dollar.

Players didn't necessarily need to buy PEDs; they could make money by starting in-game businesses, hunting or scavenging animal dung. In theory, each player had an opportunity to profit. And, at any time, players could convert their PEDs back to real-world currency.

Virtual reality

According to MindArk, $350 million circulates through the Entropia Universe annually. The Entropia Universe Cash Cards were supposed to simplify the process by letting players withdraw their PEDs as real-world currency at ATMs.

The Entropia Universe Cash Cards were not technically ATM cards but reloadable debit cards with their own fee structures: a $25 purchase fee, a $3.50 monthly service fee, a $3.50 fee to transfer PEDs to the card, $3.50 fees for each withdrawal and a $1 fee if a transaction was rejected - on top of normal ATM fees. The PED's value, just like real-life currency, comes from faith in the economy. One of the most faithful is Jon Jacobs (known in-game as Neverdie), an artist/filmmaker who spent $100,000 of a loan against his real-life house to buy an Entropia space station, which he resold as apartments and commercial space. He called the ATM card "the Holy Grail of massive multiplayer gaming that everyone has been looking for."

The announcement made a news splash. The New York Times, BBC and ABC news all ran with it.

"MindArk is changing the online gaming and virtual community landscape by introducing a real cash economy that offers validity and secure monitoring of one's funds," said Jan Welter, the company's Chief Executive.

"We aim to become unique forerunners of online virtual entertainment. And with the ATM technology and economic stability of our universe, we are creating the next level of the online experience."

And they were unique forerunners until January 2007, when players were informed that MasterCard Worldwide would no longer support ATM traffic from the card's backing financial institution, North York Community Credit Union of Ontario, Canada.

Not long after, Entropia announced refunds to be credited to players' PED accounts.

Virtual economics

MindArk Business Development Director David Simmonds would not say how many cards had been issued, but he did say they were very popular and exceeded expectations.

After the program crashed, he said, "the money is safe and those who want to cash out will be able to do so with an express bank transfer. It's unfortunate, but we'll work it out."

MasterCard's action came after the North York Community Credit Union and the card provider, CardOne Plus, had a series of run-ins with a regulatory body, the Financial Institutions Commission of British Columbia, which in its fourth and last action, a penalty order, called North York a "rogue financial institution" having "shown complete disregard for the laws of British Columbia."

But Neverdie's faith never died. Jacobs claims to earn $15,000 to $20,000 from his investments in Entropia Universe. He said he has never had a problem with payments, but normally has money wired directly to his account.

He sees Entropia Universe as continuing to expand and is not concerned about the end of Entropia Cash Cards. Now Entropia is offering in-game banking licenses, and Jacobs is considering setting up shop as a virtual lending institution, given that he's often asked for loans by fellow Entropians anyway.

He's not alone: According to Simmonds, several leading banks are considering buying licenses and helping Entropia revitalize its cash-card program.

But Dan Hunter, Ph.D., a professor of law at the University of Melbourne Law School who also teaches business ethics at the Wharton School of Business, is incredulous at MindArk's continued dabblings in virtual economics. "I'm surprised if anyone can take money out of the Entropia Universe," Hunter said.

"It's operating in a grey area of regulation. It's not a bank, not a government, not a casino but has elements of all them. It is not clear why it's not regulated as such."

But faith in online communities in general continues to grow. Last year, Newsweek covered the story of virtual real estate developer Anshe Chung, who made $1 million moving parcels of pixels in Second Life, a game similar to Entropia.

By January 2007, World of Warcraft grew to 8 million subscribers. World of Warcraft gold, which is sold against the game's rules, trades for about $0.40 at sites like MySuperSales.com.

Meanwhile, Entropia players can still acquire cash cards, though their functionality has been put on hold after the recent tumult.

Simmonds said at least one bank interested in the Entropia banking licenses (which he wouldn't name, other than to say it's one of the biggest in the world) might also begin handling transactions for the cash cards.

"Without a doubt the ATM system will be back and fully functional," Simmonds said.

ATMmarketplace Editor Bryan Harris contributed to this report.

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