The buyer, Jon Jacobs who plays in the game as a character called Nerverdie, is developing the space station into a virtual night club through which the entertainment industry can sell music and videos to gamers.

"We're bridging the gap between virtual reality and reality right now," said Jan Welter, founder of Project Entropia.

Alternate worlds

Project Entropia is one of several games known as massively multi-player online role-playing games (MMORPGs).

The games allow people to inhabit alternate virtual worlds as a character of their choosing.

In Entropia, these avatars, as they are known, play out their virtual lives in a planet called Calypso that has two continents with large expanding cities.

The basic version of the game is free. But according to Jan Welter, just like the real world you need money to experience everything the Universe has to offer.

"If you fell out of nowhere and landed in a street in London, you could walk around there for free. But if you want to have fun then you need to spend money," he said. "It's the same in our world."

The Entropia economy works by allowing gamers to exchange real currency for Project Entropia Dollars (PEDs) and back again into real money.

Ten PEDs are the equivalent to one US dollar.

Making money

Gamers can earn cash by accumulating PEDs via the acquisition of goods, buildings and land.

For example a gamer may choose to be a hunter who traps virtual animals for their furs. These can then be sold to a virtual seamstress who makes and sells clothes.

The founding company, MindArk, makes money because all of the tools used by characters in the game have a finite life and need to be repaired.

If a hunter needs to continue using his weapon to make money, he must pay MindArk to repair it.

Last year $165m passed through the game and the founders of the online Universe expect that to at least double in 2006.

The new cash card blurs the boundary between the virtual and physical world even further.

It allows people to access their virtually acquired PEDs and convert them into real world money at any cash machine in the world.

"We are creating the next level of the online experience," said Mr Welter.

Virtual treasure

The card, issued by MindArk, is associated with the players Entropia Universe account and has all of the features of a real world bank account.

Players can transfer, withdraw, deposit and even view account balances using the system.

"It is incredible to now think that it is possible to manufacture and sell a virtual item one minute and then go out and buy real dinner the next minute, with the same funds," said Jon Jacobs, owner of the virtual space resort.

For many people, games like Entropia have become a real source of income.

In December 2004, another character called Deathifier, bought a virtual treasure island for $26,500 (£13,700).

The real person behind the character, an Australian gamer called David Storey, recouped his money within a year by selling land to build virtual homes as well as taxing other gamers to hunt or mine on the island.

The sale of the island was in the Guinness book of World Records as the most virtual dollar ever spent.

The sale of the space station in 2005 is the new record holder.