Interview: David Simmonds on the Business of Entropia Universe

By Steven Crews | November 19, 2007 | | Filed under: Features

The last time I played Entropia Universe, John Kerry was looking like the next President of the United States, and the game was still going by the moniker of Project Entropia.

At the time, I felt that while it certainly had some very novel ideas going for it, I didn’t think that what seemingly amounted to an RMT system with a game thinly layered over the top could long survive.

Obviously, they have proven me wrong.

I will admit to not having followed the game much since then… so, this interview was as much for my own edification as anyone else’s. As such, I would like to apologize in advance to any hardcore Entropia players who have come here expecting me to inquire about whatever the great burning issues of the day are. There’s always next time.

When I arrived at the MindArk booth on the floor of E for All, I was informed that I had my choice of two interview subjects: Someone from Marketing, or Jon “NEVERDIE” Jacobs, who made the news awhile back after spending $100,000 on a virtual asteroid.

I glanced over at NEVERDIE, who presently was gesticulating enthusiastically towards a news camera, his mohawk bobbing rhythmically up and down, the reporter holding the microphone looking on in slack-jawed bewilderment.

At that moment I came to the conclusion that, while I was sure NEVERDIE was a very pleasant fellow and all, I couldn’t quite see what pearls of wisdom there were to be gleaned by interviewing him.

I opted for Marketing.

Unfortunately, we chose a somewhat high-traffic area within earshot of the horrid crooning at MTV’s Rock Band display as the site for our discussion. As a result, the audio quality of the interview came out too poor to post, and only the transcript is available.

The MMO Gamer: Let us begin with my standard interview starter: For those among our readers who may be unfamiliar, tell us a little bit about yourself, and what it is you do for Entropia Universe.

David Simmonds: My name is David Simmonds, and I’m the Business Development Director. My job is to talk to the different partners that are interested in coming in and joining Entropia Universe, whether they’re a full partner or some kind of affiliate, to really look at the different companies who want to come in and join.

There are actually a lot of companies which we’re contacting at the moment, but we’ve been very, very selective on what companies come in. The companies we’re choosing are the ones which have full, exciting content, and services and products which are of use to our users.

We don’t want a three-dimensional website. We don’t want to be that.

The MMO Gamer: Also for those among our readers who may be unfamiliar with the basic concept of Entropia Universe, could you please explain it for us?

David Simmonds: Sure. MindArk, which is the company, develops and maintains a virtual world which is called Entropia Universe. This universe is based on a real cash economy, which means that we’re using real cash inside this world.

It’s very much like when you go abroad. What do you do? You take your American Dollars, and you go abroad and change them into say, English Pounds, and you entertain yourself, have fun, maybe do business, and maybe even make some money. And then what do you do? You change it back into American Dollars. It’s very much similar to that.

So you take your money, put it into Entropia Universe, have fun, entertain yourself, play the game, maybe be an entrepreneur or make money—and we have many entrepreneurs making money inside our world. And then you can take it out by either bank transfer, or, shortly we’ll have a electronic MasterCard which works at ATM machines as well.

So you can go in, kill some monsters, make some money, then go down and get yourself a pizza.

The MMO Gamer: So is this actually a game-type MMO, not a quote-unquote “virtual world” on the level of Second Life?

David Simmonds: When you really look at two of the most well-known games, World of Warcraft is really at one end of the spectrum: It’s just gaming. It’s a great game, and the only people who go there are gamers.

Then you’ve got the other side of the spectrum, which is Second Life. And Second Life is a three-dimensional website. That’s what it is. It’s a three-dimensional website, and a lot of businesses come in there to try and promote their business.

We’re really in the middle of that. We have that gaming, you can come in, you can go and kill your monsters, you can manufacture, and you can do things like that.

So there’s the whole spectrum. People can come in and do every type of activity they can do in all these other types of virtual worlds or games.

The MMO Gamer: On the game side of things, you gave an example earlier of people shooting mobs to obtain the virtual currency. What does someone who is, say, a socializer do to get money out of the system?

David Simmonds: Well, it seems like “get money out of the system,” this is a virtual world, so it’s really up to you what you do. There are many things you can do, there’s many professions you can be; a hairdresser, a plastic surgeon… for the people who actually want to come in and do social and just meet their friends inside the world, maybe they want some cool clothes or things like that.

And, if you don’t want to deposit money you don’t have to. It’s free to download, there’s no monthly subscription charges… But, there are things you can do inside this world that can earn you money.

As an example of the many different things you can do… one which I think is quite funny: All of the animals in Entropia Universe leave dung. And you can go around and collect this dung. And you think, well, “What’s that going to be useful for?”

But, there are other people who come in, entrepreneurs, who buy land, and if you were a land owner, what do you want to do? You want to attract people to your land, because you’re going to be taxing them on their hunting, and mining, and activities they do. So, you need to make your land fertile. What’s fertilizer? It’s dung. So they can sell that and make a small amount of money by doing that.

The MMO Gamer: Some of this, say, killing mobs and hoping they drop something so you can get your money back, sounds a bit like playing a slot machine. Do you have to deal with any online gambling regulations with Entropia?

David Simmonds: No. We’re under the regulations of Sweden, and we’re not classed as gambling.

Every avatar inside Entropia Universe is a very skill-based system. We have over two hundred skills which make up an avatar, and this makes every avatar inside Entropia Universe unique. There’s not one avatar with the same skills as another. And, depending on what skills you have, what equipment you use, what things you want to do, whether you’re hunting or mining, will depend on what kind of return you get.

If you’re frivolous and just go out there and shoot your gun in the air, of course you’re going to lose money, the same in the real world. But, if you’re a smart businessman, a smart hunter, or a smart gamer in the real world, there’s a very good chance you’re going to be a smart businessman, gamer, hunter in our world.

The MMO Gamer: Well, I hope everyone isn’t a smart player, or you’ll be out of business.

David Simmonds: The business plan is catered to—we want people to be smart. People come in to Entropia Universe, and whether they’re a dedicated gamer, or somebody comes in for the weekend instead of going off down to the pub and wants to have some fun.

We’ve got a GMP—a turnover each day—of over 1.2, 1.3 million dollars per day. So, there’s a very big turnover, and when you think transactions, one cent here, two cents there, one dollar there, ten dollars there, that’s a lot of transactions.

The MMO Gamer: Morbid curiosity on my part: Could you give a rough percentage of the people who play for free, versus the ones who opt to convert currency?

David Simmonds: When people come in to Entropia Universe, to understand the business model, for us as a company, whether people deposit money or not makes no difference.

Let’s say you deposit a hundred dollars inside Entropia Universe. You can leave that in your in-game wallet for six months, it’s still a hundred dollars, and then you can take that money out. That has earned nothing to MindArk, that’s your money.

The only way we make money is through the deterioration of items. So, where somebody comes in and doesn’t deposit any money, maybe they work really hard for somebody else, and collects dung, and does all these things, but they’re actually doing more activities inside the virtual world. So when they’re using items, and once they’ve maybe got some money and start doing activities, that’s where we as a company make money.

If you compare us to somebody with a subscription base—as in, World of Warcraft, great game, we love it—their best customer is somebody who pays that money and never plays. They’re not taking up bandwidth, they’re not taking up space. That type of person we make no money. It’s free to download, and there are no monthly subscription charges. We only make money when people are inside our world doing activities.