At Upland, we see a future where blockchain technology creates real-world economies for games and opens up a completely new way for ownership of assets to be treated and assigned. It will provide a new kind of value proposition which better aligns players and game operator incentives.
So what is today’s problem with traditional games?
Traditional games usually provide simulated economies controlled by game operators. In the vast majority of cases, these simulated economies do not offer a marketplace to trade or liquidate their assets.
The business models of traditional games which are “Free-to-Play” or “Pay-to-Play” fall short by not offering true ownership of digital assets to players. Creating a real-world economy in games that would include true ownership is seen as disadvantageous by game operators because they are competing against their customers/players when the latter are allowed to resell their assets.
“If you can’t sell, you don’t own it”
When players buy an asset in the traditional Free-to-Play model, they are only getting entertainment value out of it and consider their investment as a sunk cost. This is because traditional games are based on centralized database entries. These can be changed at any time by a game operator with the consequence that assets can be taken away from a player. In the worst-case scenario, if a gaming provider went out of business, players would lose all of their assets before getting the complete entertainment value out of it.
To sum it up: Players of traditional games are not in control — the game operators are. This leads to frustration by players who spend a lot of time in a game and think of their creations, enhancements, and assets as their own. Additionally, traditional games don’t allow people to prove and verify the provenance of specific virtual items, which can lead to fraud, reducing further incentives for players to spend and create in a game.
So the question is, whether there is a better approach to cope with the problem stated above. We think yes. Upland’s solution comes with the use of blockchain technology that allows the introduction of a new business model category called:
Play to Own
We believe there’s a new revolution coming that will have a strong impact on society, as blockchain technology brings to fruition the transfer of value in a decentralized, peer-to-peer manner. Said differently, after the agricultural revolution, the industrial revolution, the information revolution, the approaching “Ownership Revolution” — powered by blockchain technology — is the core foundational block for our property trading game.
However, blockchain today is still seen as a complicated technology, both difficult to understand and to use for non-techies, which is why Upland created its mission:
“To bring the benefits of blockchain technology to mass markets through gamified experiences.”
Just like in the business model “Free-to-Play”, players in Upland can start playing for free on an “Upland Visa” (see also the article Understanding Digital Assets and User Identity in Upland). Once graduated to “Uplander” i.e. citizen status, a player can be sure that any digital item they acquire will carry a tangible value that can be liquidated in a secondary market. We believe that this fact will create trust which is fundamental for an economic system to thrive.
In general, ownership and its enforcement is a crucial element of a functioning economy. It gives people a sense of security and status and they can feel a sense of ownership pride. When people take ownership of something, they are inspired to care for it in numerous ways, including creative embellishments, as well as ongoing maintenance.
Just as in the real world, a house owner will always invest more time, money, and effort to keep his house in good condition, while a tenant normally doesn’t do so to the same extent.
Upland’s core assumption is that the perceived value of truly owned digital assets is substantially higher compared to the one in traditional business models. Play-to-Own has the potential to be applied in any game, increasing customer lifetime value, engagement, and retention. It opens up new revenue opportunities that have not been possible before.
Our hypothesis is that Play-to-Own creates a superior value proposition for both the players and the game operators. Players will choose to play these types of games over traditional ones because they get ownership security and benefit from long-term value creation. Operators will observe happier and more loyal customers, therefore the Play-to-Own business model will be the future of gaming and beyond.
By Dirk Lueth, Upland Co-founder