Comprehensive Research Report on Blockchain Games: Encryption Native Core, Bubble or Revolution?

I. Introduction: What is a Full-Chain Game?

Recently, the Pass card of the full-chain game Sky Strife reached a trading volume of 21,000 ETH on the testnet, attracting the attention of many non-full-chain game players. Since the release of Pong in 1972, the gaming industry has been developing rapidly. From classic 8-bit games like Super Mario and The Legend of Zelda, to today's highly complex and socially interactive online games like Fortnite and League of Legends, gaming has long ceased to be just a simple form of entertainment. The social, competitive, and immersive experiences these games provide have surpassed our past imaginations.

With the rise of blockchain technology and the development of encryption currencies, the gaming industry is reshaping our experiences in unprecedented ways. From Axie Infinity, which closely integrates gaming with the encryption economy, to Stepn, which focuses on social interaction and innovation, blockchain gaming is gradually being seen as a hopeful large-scale application of encryption technology. People are also beginning to explore new ways to combine gaming and blockchain. Besides asset tokenization, can more elements be integrated on-chain? Thus, full-chain gaming has emerged.

So what exactly is the difference between blockchain games and traditional games?

In traditional games, all game logic, data storage, digital assets, and game states are stored within centralized gaming companies. For example, when we play Honor of Kings, Genshin Impact, or Dungeon & Fighter, all game content, including in-game assets, belongs to centralized companies.

The emerging asset blockchain games ( are often referred to as Web2.5 games ), such as Axie and Stepn, which put assets on the chain. On one hand, players can own the rights to the assets, while on the other hand, they can enhance the liquidity of the assets. However, when the game shuts down, the game assets will still face the dilemma of losing their circulating value. The relationship between asset blockchain games and traditional games is more like a complement rather than a substitute, similar to the relationship between food delivery and physical restaurants. At the same time, Web2.5 games also face competition from similar Web2.5 games as well as traditional Web2 games.

The recently closely watched full-chain games will put all interactive behaviors and states of the game on the chain, including the game logic, data storage, digital assets, and game status mentioned earlier, all processed by the blockchain, thereby achieving truly decentralized gaming.

For ease of understanding, the characteristics of full-chain games can be summarized in the following four points:

1. The authenticity of data sources is guaranteed by blockchain. Blockchain is no longer just an auxiliary storage for data, but the real source of game data; it is not limited to merely recording asset ownership, but stores all key data. This approach makes full use of the characteristics of programmable blockchain, achieving transparent data storage and permissionless interoperability.

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

3. Game development follows the principles of an open ecosystem. Game contracts and accessible game clients adopt an open-source model, providing a vast creative space for third-party developers. They can creatively output content and share it with the entire community by using plugins, third-party clients, and interoperable smart contracts, or even redeploying and customizing their own gaming experiences.

4. The game is independent of the client. This is closely related to the previous three points, because the key to truly encrypting native games lies in the fact that even if the core developer's client disappears, the game can still continue. This depends on the permissionless storage of game data, the permissionless execution of logic, and the community's ability to independently interact with the core smart contracts without relying on interfaces provided by the core team. Thus, true decentralization is achieved.

2. Why do humans need full-chain games?

Before understanding why full-chain games are needed, let's first briefly understand the current situation and operation model of the traditional gaming industry.

The essence of on-chain games is still games, and understanding the operational model of traditional games is very important and necessary for our understanding and analysis of the future of on-chain games.

1. Current status of the traditional gaming industry

Many excellent Web2 games have been born during our growth process, whether it is FPS games like Counter-Strike and CrossFire, RPG games like Dungeon & Fighter and Dragon Nest, MOBA games like League of Legends and Honor of Kings, or card games like Onmyoji and Hearthstone. Games have accompanied our generation's growth and occupy a very important part of our entertainment life.

According to data from Fortune Business Insights, the global gaming market size was $249.55 billion in 2022, and it is expected to exceed $280 billion in 2023, reaching over $600 billion by 2030. In comparison, the global market size of the film and entertainment industry was $94.4 billion in 2022. It is evident that gaming, as part of the entertainment and leisure industry, occupies a very important position in economic development. The commercialization Depth and the variety of types in gaming have many aspects worth exploring, making it the crown jewel of the leisure industry.

Why do humans love to play games

According to Statista, the number of gamers worldwide has exceeded 2.5 billion, nearing 3 billion. So how is it that games can attract more than one-third of the global population to participate? The core reason can be summarized as games meeting human needs and weaknesses from multiple aspects.

1. Escape Reality and Restart Life: Games provide a space to escape the pressures and challenges of daily life. In the game, people can free themselves from the troubles of reality, immerse themselves in a virtual world, and have a second life.

2. Burden-free socializing: For multiplayer online games, the game provides a platform for social interaction and is relatively friendly to people with social anxiety. Players do not have to worry about the gaze of others in real life, allowing them to do what they want and build relationships with others.

3. Rewards for timely feedback: Unlike the daily struggles of students and workers in real life for their studies and jobs, the charm of games lies in their rich reward systems and timely reward mechanisms. After putting in effort, leveling up by defeating monsters, and completing challenges, players quickly gain new skills, unlock new levels, or receive new items. This incentive mechanism can stimulate people's motivation to continue moving forward.

4. Low-cost free exploration: Many games offer rich virtual worlds, allowing players to explore unknown territories, interact with NPCs and other players, and drive the development of the storyline, satisfying humanity's innate desire for adventure and exploration. In the real world, however, due to constraints of money, energy, time, and geographical location, exploring is significantly more expensive compared to the game world.

5. Pursuing achievements and self-realization: By completing a series of tasks and goals, people can satisfy their desire for success and recognition, whether through leaderboards or achievement points. In the game, people can more easily achieve self-challenges and character growth.

By targeting certain, or even multiple, human weaknesses, games can cleverly meet the needs and preferences of different users, allowing them to perform well in both the breadth of audience coverage and the provision of a deep immersive experience.

Current Status and Development of Traditional Games

In traditional games, they are roughly divided into Shooter(, Adventure), Role Playing(, Battle Royale), Strategy(, Sports), Puzzle(, Action), Simulation( and other game types.

According to data from Newzoo, role-playing and adventure games perform excellently on PC, mobile, and console platforms, both ranking in the top five. Additionally, shooting games and battle royale types are also very popular on PC and console. However, on mobile, puzzle and idle games are also quite favored by users.

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) 2. The Dilemma of the Traditional Gaming Industry

However, traditional games currently face two major dilemmas: first, game publishing is restricted by the approval number, and second, the pre-launch costs of games are too high, leading to a slow recovery period and easy silent costs.

(# Game publishing is subject to license number restrictions.

A game version number refers to a specific license issued by the government that is required to publish games in certain countries or regions. This system aims to regulate game content, ensuring that games comply with the laws, culture, and values of the country or region, in order to protect minors from inappropriate content and maintain social stability.

For example, in Germany, content review for games is relatively strict, with a particular focus on content that may have a negative impact on adolescents; South Korea and Japan have a game rating system, assessed and issued by relevant national agencies.

In China, the impact of the game license number is even greater, as China implements a strict game license system, which is issued by the National Radio and Television Administration. Games need to obtain a license number before they can be released in the Chinese market.

After the release of 87 game licenses on July 22, 2021, there was a long period of stagnation, until improvements gradually began in April 2022. In April 2022, 45 game licenses were released, and another batch was announced in September and December. However, during the period of stagnation in game license approvals from 2021 until April 2022, only a few large companies survived, while many small and medium-sized companies faced bankruptcy. According to data from the Tianyancha App, from July to December 2021, over 14,000 small and medium-sized companies with registered capital below 10 million ) successively canceled their registrations.

As the world's largest gaming market, China has over 500 million people playing video games. However, the approval number has become a pain for countless Chinese companies. Even with the resumption of approval number issuance, the contraction or constant adjustment of approval numbers has become the sword of Damocles for every game project team. In the days of waiting for the approval number to be issued, one can hear countless sighs from project teams without a funding chain facing bankruptcy.

(# The cost before issuance is too