In-depth Research Report on Blockchain Games: A Revolution of Encryption Natives or a Bubble?

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

Recently, the Pass card of the blockchain game Sky Strife has gained 21,000 ETH of FOMO on the testnet, attracting attention from non-blockchain gamers towards this sector. Since the release of "Pong" in 1972, the gaming industry has experienced tremendous growth, evolving from early 8-bit games to today's complex online games, where gaming is no longer just simple entertainment.

With the rise of blockchain technology, the gaming industry is being reshaped in unprecedented ways. From Axie Infinity, which combines gaming with encryption economy, to Stepn, which focuses on social innovation, blockchain games are expected to drive the large-scale application of encryption technology. People are beginning to explore new ways to integrate gaming and blockchain; apart from asset on-chain, can more elements be put on-chain? This has led to the emergence of full-chain gaming.

So how do blockchain games differ from traditional games?

In traditional games, all game logic, data storage, digital assets, and game states are controlled by centralized game companies. The subsequent emergence of asset-on-chain games (, commonly known as Web2.5 games ), puts assets on the chain, enhancing player asset ownership and liquidity. However, when a game shuts down, assets still face the risk of losing value.

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

The main features of blockchain games include:

1. The authenticity of data sources is guaranteed by the blockchain, which becomes the storage center for all key data.

2. The game logic and rules are implemented through smart contracts, ensuring traceability and security.

3. Game development follows the principles of an open ecosystem, with contracts and clients adopting an open-source model.

4. The game is independent of the client; even if the core developer's client disappears, the game can continue.

2. Why do we need full-chain games?

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

1. Current Situation of the Traditional Gaming Industry

According to statistics, the global gaming market size was approximately $249.55 billion in 2022, and it is expected to exceed $280 billion in 2023, reaching over $600 billion by 2030. In contrast, the global film and entertainment industry market size was $94.4 billion in 2022. It is evident that gaming occupies an important position in the leisure industry, with enormous commercialization potential.

Currently, the number of gamers worldwide has exceeded 2.5 billion, approaching 3 billion. The reason games can attract so many people is mainly because they meet various aspects of human needs:

1. Provide an opportunity to escape reality and restart life.
2. Provide a low-pressure social platform
3. Reward system that provides timely feedback
4. Allow low-cost free exploration
5. Satisfy the desire for achievement and self-actualization

Traditional games are mainly divided into shooting, adventure, role-playing, battle royale, strategy, sports, puzzle, action, simulation, and other types. According to data, role-playing and adventure games perform excellently across various platforms.

2. The Dilemmas Faced by the Traditional Gaming Industry

Currently, traditional games face two major dilemmas:

1. Game release is restricted by license number.

Many countries implement a game licensing system, and games must obtain government approval before being released. Taking China as an example, the uncertainty of license approval has put immense pressure on game companies, leading to the closure of many small and medium-sized game companies.

2. The pre-issue cost is high, making it easy to incur sunk costs.

In the traditional game development model, a large amount of manpower and infrastructure costs need to be invested in the early stages. If problems arise during development, approval of the game license, or user acquisition, the initial investment becomes a sunk cost. This results in a long profit cycle and a high risk of not achieving the expected returns.

3. Attempts to Break Through Web2.5 Games

In the face of these difficulties, Web2.5 games have made breakthroughs first:

1. Aimed at global users, bypassing domestic version number restrictions.
2. By issuing NFTs and tokens, income can be generated in the early stages of the game, lowering the capital threshold.

Web2.5 games such as Axie and Stepn have achieved success in regions like Southeast Asia. However, as the economic model collapses, the craze for Web2.5 games is gradually fading.

Developers are beginning to explore new directions, with some shifting towards AAA game development, while others are turning to full-chain games, exploring new possibilities.

3. Analysis of the Current Status of the Whole Chain Game Industry

Currently, the entire blockchain gaming sector is still in its early stages, with game projects and related infrastructure under development. The blockchain gaming industry can be broadly divided into four categories: game projects, game engines, game chains, and distribution platforms.

1. Full-chain game project

Currently, the number of playable full-chain games does not exceed 10, most of which are still in the testing phase. The game types are mainly strategy-based, with some projects attempting to simulate management direction. Here are a few representative full-chain game projects:

1. Dark Forest

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

The main highlights of the game include:

• Game logic, data, and state are all on-chain, and centralized entities cannot unilaterally control.
• The open ecosystem allows players to create custom content.
• Use zk-SNARKS technology to achieve information hiding, increasing strategy

Dark Forest redefines the possibilities of Web3 gaming and is seen as a model of the combination of gaming and encryption. The total number of players has exceeded 10,000.

2. Loot Survivor

Loot Survivor is a Loot ecosystem game developed by the BibliothecaDAO team. Loot is an NFT project based on Ethereum, where each NFT is a list of equipment in white text on a black background, allowing for community creation.

Loot Survivor is a text-based dungeon game where players interact through text to fight monsters and level up until their character dies. The game uses a leaderboard mechanism to encourage players to challenge themselves.

3. Imminent Solace

Imminent Solace is a treasure brawl game based on ZK fog of war, developed by PTA DAO. The game combines PVP plunder, autonomous world exploration, and PoW resource mining elements, with gameplay similar to Dark Forest but simpler to operate.

The ultimate goal of the project is to create a war simulation game similar to EVE, where players will incur actual resource and asset losses in the game.

Currently, most blockchain games are web-based games, with almost no PC and mobile versions. This is mainly because web development is fast and low-cost, making it suitable for quickly validating concepts.

2. Full-Chain Game Engine

The main goal of the full-chain game engine is to provide universal code and simplify the game development process. Unlike traditional game engines, the full-chain game engine focuses more on issues such as contract and client state synchronization, content updates, and interoperability.

The mainstream full-chain game engines currently are:

1. Mud

Mud is the first full-chain game engine released by Lattice in November 2022. Currently, the Mud ecosystem has the most developers and has given birth to multiple projects such as Dark Forest, OPCraft, and Sky Strife.

2. Dojo

Dojo is a game engine that was born in the Starknet ecosystem and was officially released in February 2023. The Dojo ecosystem projects include Loot Survivor, Loot Realms: Eternum, and more.

The emergence of these game engines has greatly lowered the development threshold for full-chain games, promoting the development of the entire track.

3. Full Chain Game Chain

Currently, blockchain game projects are more inclined to develop on general Layer 2 solutions such as Arbitrum Nova, Optimism, and Starknet, rather than using dedicated gaming chains.

Some teams are developing proprietary chains for full-chain games, such as Argus's World Engine and Curio's Layer2 developed based on OPStack. These new chains aim to address the contradiction between the push-based model of blockchain and the loop-based model of games.

4. Full Chain Game Aggregator/Distribution Platform

As on-chain games are still in the early stages, the number of playable games is limited, and there are currently few dedicated on-chain game aggregation platforms. There are mainly two platforms:

1. Composable Hub

Composable Hub is an aggregation platform focused on full-chain games under Composablelabs. Currently, it aggregates 56 full-chain games, of which 14 have been launched, 12 are in the testing phase, and 30 are still in development.

2. Cartridge

Cartridge is a full-chain game aggregator of the Starkware ecosystem, dedicated to creating a Web3 version of Steam. Currently, it has aggregated 5 games from the Starknet ecosystem.

Four, the core advantages of full-chain games

The whole-chain game achieves higher fairness by putting game logic, state, data storage, and assets all on-chain. At the same time, since both the game contract and client adopt an open-source model, it provides a broad creative space for third-party developers.

This openness allows the game to transition from a binary model of "company providing, players consuming" to a new model where every player can become a game creator.

1. From PGR to UGR, empowering players with the right to create

In traditional games, players can only consume content provided by the official source ( PGC mode ). Although some secondary creations can be made, they do not involve the core rules.

The openness of on-chain games allows players to freely build game features and experiences, achieving a transition from PGR( Professional Generated Rules ) to UGR( User Generated Rules ). This satisfies humanity's desire to "become a god" in creative pursuits.

The advantage of on-chain games lies in the fact that content created by different players can interoperate on the same backend, allowing data to circulate between different clients. This is fundamentally different from traditional games like the mod system of Minecraft.

2. Fairness and Transparency

Another major advantage of blockchain games is their transparency. This is especially important for gambling games, as it ensures the integrity of the gaming process.