Anshe Chung Launches Cross-World Virtual Exchange

Virtual real estate specialist Anshe Chung Studios announced today that it is preparing to launch a cross-world “virtual financial market” that will allow direct investment across virtual world boundaries. The company, the business brand of Anshe Chung (the Second Life avatar of virtual entrepreneur Ailin Graef) said the venture is the first step toward an open, cross platform “Metaverse economy” unbound by the borders of virtual worlds.

While not involving and real money trading (RMT), this venture bears close watching, as it is likely to be the best test yet of cross-world investment. It appears that it won’t function as a virtual currency exchange per se, but will allow players from one world to purchase assets in another. But it’s structured with the virtual entrepreneur in mind, and the press release promised “several high profile virtual company IPOs to lead the way to a new culture of cross platform virtual investment.”

“Some virtual worlds like Second Life, Entropia Universe and IMVU have demonstrated the enormous economic potential that exists when key sectors of a virtual world economy such as content creation, trade, banking and services are privatized,” said Graef. “This has lead to a boom in each of these worlds that has yet to be matched by any other economy, real or virtual. Now the time is right to go further and link these exciting spaces together, to begin with the creation of the global Metaverse.”

The new financial market will allow Second Life residents to invest their Linden dollars directly in ventures such as banks, malls or biospheres in Entropia Universe while those who earned their fortunes in Entropia dollars will be able to easily diversify their investments into assets such as Second Life virtual land funds, virtual game development businesses or the IMVU fashion design industry.

Mark Wallace at 3PointD offers some thoughts on Anshe’s announcement:

The market Anshe envisions, of course, is more than just a forex market, and it’s entirely possible we’ll start to see a lot of cross-border investment. One of the best things Anshe could do here would be to quantify that trade for us, or at least make the figures available for people who might like to construct financial reports on the state of affairs. Let’s hope the “business girl” is at least that open with the information flowing through her markets. It should be of slight concern that there is no regulatory body, but in fact these kind of flows will eventually be regulated by the same people who regulate real-world financial markets; it remains only for virtual markets to grow large enough to merit oversight. For now, there’s a new wild west frontier opening up for any virtual investment cowboys out there. Saddle up.

Indeed. One of the interesting issues about cross-world currency exchange and investment is the opportunity for arbitrage - making money by exploiting price differentials between two or more markets. It’s not immediately clear what sort of arbitrage opportunities may arise from Anshe’s virtual financial market, and whether the trading system can be automated (and eventually gamed) to favor players in one world, or simply the more attentive investors.