In-Depth Research on Blockchain Games: Is it a Bubble or a Revolution with Encryption at its Core?

1. Introduction: What is a full-chain game?

Recently, the Pass card of the full-chain game Sky Strife reached a transaction volume of 21,000 ETH on the testnet, attracting the attention of many non-full-chain gamers to the charm of this field. Since the release of "Pong" in 1972, the gaming industry has rapidly developed, evolving from classic 8-bit games to today's complex online games; gaming has long ceased to be merely simple entertainment.

With the rise of blockchain technology, the gaming industry is reshaping player experiences in unprecedented ways. From Axie Infinity, which closely integrates gaming with the encryption economy, to Stepn, which is centered around social innovation, blockchain games are gradually being seen as a hope for the large-scale application of encryption technology. People are beginning to explore new ways to combine gaming and blockchain; besides asset tokenization, can more elements be tokenized? This has led to the birth of full-chain gaming.

So how is a full-chain game different from traditional games?

In traditional games, all game logic, data storage, digital assets, and game states are controlled by centralized gaming companies. The subsequently emerged asset-on-chain games (, commonly known as Web2.5 games ), such as Axie and Stepn, put assets on-chain, allowing players to have ownership of assets and increasing liquidity. However, when the game shuts down, these assets may still lose their value.

The highly anticipated on-chain games will put all interactive behaviors and states of the game on the blockchain, including game logic, data storage, digital assets, and game states, all processed by the blockchain to achieve truly decentralized gaming.

The main features of blockchain games include:

1. The authenticity of the data source is guaranteed by the blockchain. The blockchain is not only an auxiliary storage for data but also the true source of game data.

2. The game logic and rules are implemented through smart contracts. Various operations in the game can be executed on-chain, ensuring the traceability and security of the logic.

3. Game development follows the principles of an open ecosystem. Game contracts and clients adopt an open-source model, providing creative space for third-party developers.

4. The game is independent of the client. Even if the core developer's client disappears, the game can still continue, achieving true decentralization.

2. Why do humans need full-chain games?

Before discussing the necessity of full-chain games, let's first understand the current state and operating model of the traditional gaming industry.

1. Current Status of the Traditional Gaming Industry

The development of the gaming industry has accompanied our growth, from FPS games like Counter-Strike, to RPG games like Dungeon & Fighter, and then to MOBA games like League of Legends, games have become an indispensable part of entertainment life.

According to data from Fortune Business Insights, the global gaming market size in 2022 was $249.55 billion, and it is expected to exceed $280 billion in 2023, potentially surpassing $600 billion by 2030. In comparison, the global film and entertainment industry market size in 2022 was $94.4 billion. This shows that gaming occupies an important position in economic development, with significant potential for commercialization in both depth and breadth.

1)Why do humans love playing games

According to Statista, the number of gamers worldwide is approaching 3 billion. The reason games can attract more than a third of the world's population is mainly that they satisfy human needs from multiple aspects:

1. Escape Reality and Restart Life: The game provides a place to escape the pressures of daily life, allowing people to have a second life in a virtual world.

2. Burden-free socializing: Multiplayer online games provide a friendly social platform for socially anxious individuals, allowing players to freely establish relationships with others.

3. Timely Feedback Rewards: The game provides a rich rewards system and a timely feedback mechanism to motivate people to keep moving forward.

4. Low-cost free exploration: The game offers a rich virtual world for players to explore, satisfying humanity's desire for adventure, with costs far lower than exploring the real world.

5. Pursuing achievements and self-realization: By completing game tasks and objectives, individuals can fulfill their desire for success and recognition.

2) Current Status and Development of Traditional Games

Traditional games are mainly divided into types such as shooting, adventure, role-playing, battle royale, strategy, sports, puzzle, action, and simulation. According to data from Newzoo, role-playing and adventure games perform well on PC, mobile, and console platforms. Shooting and battle royale games are very popular on PC and console, while puzzle and idle games are more popular on mobile.

2. The Dilemma of the Traditional Gaming Industry

Traditional games face two major dilemmas: game distribution is restricted by licensing numbers, and the high costs before game distribution lead to a long payback period.

1) game release is subject to licensing restrictions

The game license number is a permit system for the distribution of games in some countries or regions, aimed at regulating game content. In China, the license number system is particularly strict and is issued by the National Radio and Television Administration. From July 2021 to April 2022, the suspension of license number approvals led to many small and medium-sized game companies facing bankruptcy. Even with the resumption of license number issuance, the contraction or adjustment of license numbers remains a major challenge for game project parties.

2) High pre-issue costs can easily lead to sunk costs

In the Web2 game development model, the game development stage needs to bear upfront human resource and infrastructure costs, and there is idle time cost during the approval stage, with profit sharing only occurring when the game is released and generates commercial revenue. A large amount of cost is incurred in the upfront stage, and once issues arise in the development, approval, or user acquisition stages, the initial investment becomes a sunk cost. For medium-sized games, costs typically amount to several million dollars. The long development and release cycle extends the profit cycle, increasing the risk of achieving expected returns.

3. The Breakthrough Attempts of Web2.5 Games

Faced with these difficulties, Web 2.5 games are the first to attempt to break the deadlock. On one hand, they bypass domestic licensing restrictions by targeting global users; on the other hand, by issuing NFTs and tokens, they can generate revenue in the early stages of the game, reducing the financial threshold for game production.

Notable games such as Axie and Stepn have emerged in the Web2.5 gaming space. Axie is popular in Southeast Asia, where many people earn an income above the local average salary through the game. Stepn's "move to earn" model has also attracted the attention of many non-Web3 users. However, as the Ponzi economic model collapsed, subsequent Web2.5 games failed to spark a similar craze.

Developers are beginning to explore new directions, with some gravitating towards AAA titles, trying to carve out a piece of the pie among Web2 users; others are turning to on-chain games, exploring new possibilities and value verification. In the emerging industry of Web3, there are always those willing to be pioneers, forging new paths.

3. Analysis of the Current Status of the Blockchain Gaming Industry

Currently, the full-chain gaming sector is in a very early stage, with game projects and related infrastructure still under development. The industrial map of the full-chain gaming field can be roughly divided into four categories: full-chain game projects, full-chain game engines, full-chain game dedicated chains, and full-chain game distribution platforms.

1. Full-chain game projects

Current on-chain gaming projects are still in the early stages. The following analyzes several representative projects to understand the status of on-chain gaming.

Most of the experiential projects are still in the testing phase, and the number of fully playable on-chain games on the market does not exceed double digits. The game types are primarily strategy (SLG), with some projects also attempting to simulate management direction.

1)Dark Forest

Dark Forest is a representative work of the whole chain game, a decentralized strategy game created using zkSNARKs technology on Ethereum. Developed by MIT graduate Brian Gu( under the pseudonym Gubsheep), it is partially inspired by Liu Cixin's science fiction novel "The Dark Forest."

As a space conquest strategy game, players start from their own planet to explore the universe, developing their empire by discovering and conquering other planets and resources. The main highlights of Dark Forest include:

• The game logic, data, and state are all on-chain, and centralized individuals cannot independently control the results of game actions.
• Free and open game ecosystem: The open-source full-chain game model grants permissionless interoperability, giving rise to a thriving secondary creation ecosystem ( plugin ).
• Using zk-SNARKS technology to achieve information hiding ensures the playability of strategy games.

Dark Forest redefines the possibilities of Web3 gaming and is regarded as a model of the combination of gaming and encryption. It is not just a game, but more like the spiritual totem of on-chain gaming, showcasing the free and open combinatorial gameplay and the prosperous secondary creation ecosystem that can be generated based on on-chain gaming.

2)Loot Survivor

Loot Survivor is an important component of the Loot ecosystem developed by the BibliothecaDAO team. Loot is an NFT project released by Dom Hofmann on August 28, 2021, characterized by each NFT being a text description in white characters on a black background, with very open interpretation rights, attracting a large number of ecological contributors and derivative projects.

Loot Survivor is a text-based dungeon game ( Roguelike ), which made its debut at the Lisbon Blockchain Gaming Summit on May 25, 2023. The gameplay is simple, involving monster fights through text interactions, until the character dies, and encourages players to continuously challenge themselves through a leaderboard.

Overall, the Loot Survivor game is relatively small in scale and has limited playability, mainly inheriting the Loot ecosystem and adding a gamified narrative to it.

3)Imminent Solace

Imminent Solace is a recently launched treasure brawl battle royale game based on ZK war fog, developed on the MUD engine. Developed by PTA DAO, it integrates PVP looting, autonomous world exploration, and PoW resource mining elements. The gameplay is similar to Dark Forest, but the operation is simpler, providing a better user experience.

The ultimate goal of the project is to create a war simulation game similar to EVE, where players will face actual resource and asset losses during the game and need to formulate strategies. Imminent Solace is a highly playable game among recent blockchain games, with good game interaction and experience.

In addition, there are games like Sky Strife and OPCraft developed by Lattice, the text game Word3 by SmallBrain, the Web3 version of Werewolf called Framed, as well as battle royale Loot Royale and simulation game Genki Cats, that are exploring the full-chain gaming path, most of which are still in the testing phase.

Currently, all chain games are basically web-based.