Anshe Chung Wins Entropia Banking License
Nate Randall of RCE Universe sends along the news that Second Life mogul Anshe Chung has won one of five banking licenses recently auctioned in the virtual world of Entropia Universe. Though billed as “banking licenses,” they really give their holders the right to use the in-world interface and non-player characters to make collateralized loans and collect interest, which is an interesting way to go about it. Entropia notes, of course, that “Should an interested party hold a real banking license in the real world, many more services and features can be added.” It doesn’t appear any of the winners meet that qualification, although they are listed only be avatar name, so you never know. It’s an interesting prospect.
Randall seems to have scooped Entropia itself, which is still running the auction announcement. According to Randall’s figures, Anshe seems to have been almost the shrewdest bidder, winning her license for PED600,000, or US$60,000 — the Entropia currency trades at a fixed 10 to the U.S. dollar — while the other winners bid PED590,608, PED900,002, PED950,001, and PED999,000. The auctions were held in the in-game auction system, Randall reports, where bidding was fierce in the final minutes.
Anshe (whose typists are a husband-and-wife team that split their time between Germany and China, where their virtual business has a very real office) has been doing business in Entropia, IMVU (where she sells “romantic poses,” which was just the kind of thing that got her started in Second Life) and There.com (and perhaps other corners of the metaverse) for some time. It’s hardly a surprise that she’d be interested in an Entropia banking license. She’s been operating fairly quietly in recent months, but apparently doing fairly well, if she can afford to put up the virtual equivalent of $60,000 to open what amounts to a pawn shop.
The other licensees included John NEVERDIE Jacobs, who made headlines a while back for his US$100,000 purchase of an Entropia space station. Note, however, that Jacobs has worked as an Entropia spokesperson. I am told by one Entropia exec, however, that he was not in the company’s employ at the time of the space station purchase.
The licenses promise two years of exclusivity for the five virtual bankers. The licenses continue after that period, but more may be issued once the two years is up. Winners also get the right to help design the building they will do their business out of, on which they will also have to pay an unspecified rent.
To insure everything stays on the up and up, Entropia will force loans to be made through non-player characters that will “work” in the bank buildings. Bank owners will be able to have live staff on hand to help customers through the process, but the loans themselves must be made via the NPC.
A reserve of PED1 million (US$100,000) must be put up by each license winner within 20 days, according to Entropia. It doesn’t say whether this must be maintained intact or can be used for the business of banking, however. Bankers will also be forced to pay “a 5% percentage of all interests charged” to MindArk, the company behind Entropia.
Feeds
This was months in the waiting for Entropian participants and something we have been covering since the original press release from MindArk. Certainly, it is big news given that the banks act as a lender of virtual goods and moneys while making interest. Although, it has sparked a bit of discussion and debate surrounding how the banks will actually affect the platform. Some have suggested that they ought to be viewed as potential pawn shops rather than actual banks, although until the bids finalize and more information is given we can only speculate for the next 20 days.
Certainly, the dollar amounts of these bids cannot be overlooked.
As an Entropian participant for four years who can be critical of the platform at times, this move really seeks to do several things imo. First, a lending system has long been requested by participants. This is probably not the sort they had in mind, but nonetheless it does address the very real issues that the community has had through the years pertaining to the lending of items and PEDs (the currency which is pegged 10 to 1 to the USD) to prevent scamming and create a legitimized in-world lending system.
Secondly, and perhaps more importantly, this brings about what some call ‘Fresh Blood’ into the E.U. mix. Up to now, E.U. has seen a great influx of new participants (since the sale of Treasure Island in late ‘05 and the virtual nightclub known as Club Neverdie that sold for $100kUSD’s last year, shopping malls recently sold in the tens of thousands of USDs) that are eager to invest in the platform. Yet there has little to invest in, frankly. These five banks may work to appease those who have been anxiously awaiting their opportunity to throw some large dollars into E.U.
Third, it of course brings publicity for MindArk’s Entropia Universe. While the meat and potatoes of any large virtual sale will be seen over time, the potential revenue such large aquisitions raise for a company such as MindArk can be very beneficial (no brainer).
I do not expect that the bidding is completely over, as each of the five banks will have to prove they have the 1million PEDs ($100k USDs) within 20 days. There is also discussion centered around which banker will take which location (they have a choice based on the highest to lowest bidder), and that has led to further speculation that perhaps there may be some flip-flopping of the line order in the meantime.
As a E.U. and SL participant, I believe the official entry of Anshe into the EU marketplace will greatly benefit many people. The E.U. community has remained fairly enclosed, but the broadening of outside investors such as Anshe does bode well with many E.U. inhabitants.
All in all, the big news here is the potential expansion of Anshe’s business as she enters a new platform which could have some large ramifications in time.
Bonnie Boglioli Randall
aka Svetlana
RCE Universe
“Anshe seems to have been almost the shrewdest bidder….”
Not true. Anshe won license number 5. This means she gets the last choice as far as location. License #1 picks location first, and so on.
As we all know, it’s location, location, location. Anshe’s virtual pawn shop may end up in noobville (also known as Port Atlantis.)
Cheers
Thoreau
http://myentropianlife.com
Yeah, cool stuff. Mindark is still tight-lipped when it comes to if a real bank is behind any of the winners (besides Neverdie and Anshe), but I guess they will release something to the hungry public soon.
It would be so cool if a real bank is in the mix. :-)
@thoreau: aha, I hadn’t read that anywhere, interesting point.
Just an fyi that I spoke with Jon Jacobs (aka NEVERDIE) earlier this morning and have updated our site with the conversation for those interested. Not much new feedback, although it is worth noting here that even he did not have any further insight on certain things that have been discussed. Most notably, whether or not there will be the ability to hand over the deeds to such real estate as retail shops while retaining access to the shop. That would enable shop keepers to leverage the price of their shops in order to buy new items to expand their inventories, and would certainly be a most welcomed situation for many shopkeepers, consumers and presumably bankers in Entropia U. That quick conversation can be read here: http://rceuniverse.com/forum/index.php?showtopic=5823&hl= (hope you don’t mind the link Mark).
Bonnie Boglioli Randall
aka Svetlana
RCEUniverse.com
Don’t mind it at all. Awesome, in fact.
What’s interesting to me about all this is that while everybody always talks about how there have to be bridges between worlds and they are always demanding that Lindens and There make bridges and have portability and have moveable identity and all of that, Anshe Chung has just gone and *done* it. She has proved that the biggest bridge between worlds is just entrepreneurial *people*, not just technology.
[…] Second Life land baron Anshe Chung wins one of five licenses to open a “bank” (really a virtual pawn shop) in Entropia Universe.read more | digg story […]
Totally agree, Prok, that will always be the strongest bridge. That’s what will drive the development of the technological links.
@ Prok & Mark
I’ve always wondered WHY these people would like bridges built between Virtual Worlds. The companies involved aren’t likely to allow the economy drain or trade between worlds, the avatars MAY look similar but with sci fi VR’s sure to come I can’t expect my alien to fit in well with There.com. Seems to me the whole idea is for the sexy factor (wow look at this cool trick I can do) or to consolidate logins and passwords. ;)
Back to the Banking Licenses, I am anticipating a release from MindArk very soon. If you look at their history, always a big press release after an event like this. Marco|MindArk has said he cannot confirm or deny that a Real Life financial institution won a license, yet. I would suspect more big news is coming.
Also, my sources tell me that Anshe feels she has something very big up her sleeve with regards to her purchase. We’ll see what that means soon enough I would guess.
Nate Randall
aka King Buzzo
RCEUniverse.com
Yes Prok, you are absolutely spot on with regards to Anshe. I am looking forward to seeing how she utilizes this latest aquisition. Thus far, she’s been staying under the radar, although it does sound like she’s interested in giving us an interview once the banks officially open their doors. No doubt she has some large plans, and how they relate to her Second Life holdings will be most interesting to follow.
Bonnie
The official press release can be found here: http://www.marketwire.com/mw/release_html_b1?release_id=249893