Sweden-based Entropia Universe has been chosen to create a cash-based virtual economy for China in collaboration with Chinese online entertainment company Cyber Recreation Development (CRD).

CRD is supported by the Beijing Municipal People's Government, and Entropia Universe--managed by Swedish company Mindark--predicts it will generate more than US$1 billion annually from the partnership with CRD.

An estimated 10,000 jobs will be created in China on the back of this deal, with staff working from home inside the Entropia Universe.

Aside from creating jobs, David Liu, CEO of CRD, said environmental benefits were an important consideration for the project--the more people working from home inside Entropia Universe the less pollution is generated by people commuting to work.

The collaboration will allow the Entropia Universe to support up to seven million concurrent users, with an overall aim of attracting roughly 150 million users from all over the world.

The Entropia Universe features a traditional 3D virtual-world environment but has more of a gaming-feel than virtual worlds such as Second Life, as it is set in a "distant sci-fi future".

Ri Pierce-Grove, analyst at Datamonitor, told ZDNet Asia's sister site Silicon.com: "Entropia's initial impression is of an interesting hybrid, with gaming elements integrated more strongly into its social experience."

Pierce-Grove added: "Although Second Life loomed larger in the popular imagination, the deal with China is already catapulting Entropia into higher media prominence. The ability to grow under the protective umbrella of Beijing will give Entropia a strong advantage in the Chinese market."

Anything bought or sold in the Entropia's currency--called Project Entropia Dollars (PED)--can be changed back into real funds at a fixed exchange rate of 10 PED to US$1.

Sandy Shen, a Gartner analyst based in Shanghai, said: "From the business perspective, Entropia will face challenges because the content is very foreign. I think that's where CRD could add value since it is already signing up with brand companies in China so it could localize the content."

Shen added: "This agreement actually allows interconnection between the two platforms: Entropia Universe entering China using Dotman's platform, and Dotman entering Europe using Mindark's platform. I think this is a key motivation for the partnership."

At the moment, the Entropia Universe lies on one planet called Calypso--which encompasses two continents with large expanding cities that offer a variety of entertainment and social interaction for citizens.

Entropia Universe hopes this agreement with China will generate hundreds of new planets and open up space for travel between them.

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