Swedish firm sells virtual world to China

China will soon have its first cash-based virtual world, where millions of people can work, socialize, learn and fall in love, Sweden-based Entropia Universe announced on Wednesday.

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Entropia said it was chosen to create an online universe of planets populated by avatars, the animated stand-ins for human users.

It took nearly a year to negotiate the deal, Entropia said, with the Cyber Recreation Development Corporation (CRD) the online entertainment division of the Beijing Municipal People's Government.

Entropia won out over competition including popular virtual world Second Life, in part because it is built around "security, safety and control" of a cash economy, said Marco Behrmann, spokesman for Entropia's creator, MindArk.

"We are extremely happy both to present Entropia Universe to the Chinese market and also to have found such perfect partners in CRD," Behrmann told AFP.

"The Chinese market is huge and we believe that the safe system that we have with Entropia is a very suitable fit."

Behrmann declined to disclose the financial terms of the China deal. The computer servers supporting the virtual world will be located in China and monitored by CRD and MindArk, according to Behrmann.

When asked by AFP whether Entropia was adapted to the practice of Chinese officials to monitor and censor Internet use Behrmann said, "Our current system works well with the needs of CRD and China -- no special accommodations were necessary."

CRD chief executive David Liu predicted that the virtual worlds will generate approximately 10,000 jobs in China.

"An important aspect for this project is also the positive effects on our environment that we foresee," Liu said in a release.

"People will actually be able to work from home inside Entropia Universe, as many people do today, even from rural areas, thereby decreasing the amount of pollution generated by travel."

Liu said Entropia provides a secure operating platform for trade, business transactions, cultural exchanges and other activities.

Entropia's online universe has two planets but plans to grow to include hundreds with the expansion into China, which is to be completed by September of 2008.

As many as seven million people will be able to access China's virtual universe simultaneously and the hope is to attract some 150 million residents from around the Earth to socialize and do business there, Entropia said.

China's virtual economy is expected to eventually generate more than a billion dollars annually.

Entropia supports sales of virtual products, on-screen items made of computer code. People represented by avatars can also negotiate purchases and delivery of items in the real world.

The currency in the virtual universe is the Project Entropia Dollar (PED), which avatars can convert to and from US dollars.

Entropia entered the Guinness World Records in 2004 when a 22-year-old Australian with the in-world name "Deathifier" paid an unprecedented 26,500 dollars for a virtual Treasure Island.

MindArk was founded in Sweden in 2003, the same year it launched Entropia Universe, which charges nothing to join and has reportedly grown to more than 580,000 residents.