For sale: 6,000-acre, lush tropical island, complete with castle, a mine full of valuable resources, and exotic game to hunt: $26,500 or best offer.

An ad like that would seem like a dream to just about anyone looking to invest in some property, but throw in the word "virtual" and it's a different story. That didn't bother 22-year-old David Storey, an Australian gamer playing the PC game Project Entropia, who bought the island in an auction for cyber assets equivalent to $26,500 real-word cash.

Project Entropia, released in January 2003, is a unique massively multiplayer online role-playing game that incorporates real-world cash in its virtual economy. The game is free to acquire and charges no monthly fee to play. Instead, items in the game are purchased with real money from players' credit cards. The local economy is based on Project Entropia Dollars (PEDs), which are the equivalent of an American dime.

The 265,000 PED island is off the coast of a newly "discovered" continent on the planet Calypso, the game's setting. As sole owner of the land, Storey will have taxation rights over any sport hunting and mining that takes place on the island, as well as property rights to sell to potential buyers looking to build a home.

"I intend to create a thriving, fully functional settlement for all to enjoy," Storey said in a statement released by MindArk, the company behind Project Entropia. "The goal is to make Treasure Island the best it can be to serve the population of Calypso."

Another possible goal for Storey may be to pocket some real loot out of the deal. PEDs can be exchanged for real money in the game via a credit card transfer. The game encourages players to create a real thriving economy by selling items, land, and even services for PEDs. Those with the right entrepreneur skills can even see a profit like Storey hopes to do.

"If you think Project Entropia is going to grow and be a very successful game, this could be a very profitable investment indeed," says Indiana University's Edward Castronova, an expert in the economics of virtual worlds. "It may or may not be a wise investment in the end," he adds, "but it's probably wiser than many junk bond investments."

While this purchase may well rank as the largest amount paid for a virtual item in a game, this isn't the first case of cash being paid for in-game items. Characters and items from Sony's MMORPG Everquest have previously sold for thousands of dollars, and Blizzard has recently threatened to ban players who sell in-game items for real money in its MMORPG, World of Warcraft.

For more information on Project Entropia, check out GameSpot's previous coverage.