In-Depth Research on the Whole Chain Game: Is Crypto-Native at Its Core a Bubble or a Revolution?

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

Recently, the Pass card of the full-chain game Sky Strife reached a fomo of 21,000 ETH on the testnet, attracting many non-full-chain game players to start paying attention to the appeal of this field. Since the release of "Pong" in 1972, the gaming industry has developed rapidly, evolving from early 8-bit classic games to today's highly complex and socially interactive online games. Games have long ceased to be merely a form of entertainment. The social, competitive, and immersive experiences brought by these games 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 games with the encryption economy, to Stepn, which focuses on social interaction and innovation, blockchain games are gradually being hoped to become a significant part of Crypto Mass Adoption. People are also starting to explore new ways to combine games and blockchain; besides asset tokenization, can more elements be brought on-chain? Thus, full-chain gaming has emerged.

So what exactly are the differences between blockchain games and traditional games?

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

The asset on-chain games that emerged later, known as Web2.5 games (, such as Axie and Stepn, put assets on-chain. Players can own the assets while also increasing their liquidity. However, when the game shuts down, the game assets will still face the dilemma of losing circulation value. The relationship between asset on-chain games and traditional games is more like a complement, similar to the relationship between takeout and dining establishments. Web2.5 games also face competition from similar Web2.5 games and traditional Web2 games.

Recently, the highly anticipated full-chain games have put all interactive behaviors and states of the game on the chain, including game logic, data storage, digital assets, and game states, all of which are processed by the blockchain, thus achieving true decentralized gaming.

The characteristics of full-chain games can be summarized in the following four points:

1. The authenticity of the data source is ensured by the blockchain. The blockchain is no longer merely an auxiliary storage for data, but the true source of game data; it is not limited to just recording asset ownership, but is the storage center for all key data. This approach fully utilizes 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 redeploy and customize their own gaming experiences.

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

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) 2. Why do we need full-chain games?

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

The essence of on-chain games is also games; understanding the operational model of traditional games is very important and necessary for us to understand and analyze the future of on-chain games.

1. Current Situation of the Traditional Gaming Industry

With the development of the gaming industry, many excellent Web2 games have emerged during our growth process. Whether it's FPS games like Counter-Strike and CrossFire, RPG games like Dungeon Fighter Online 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 lives.

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 can be seen that, as part of the entertainment and leisure industry, gaming occupies a very important position in economic development. There are many areas worth exploring in terms of the depth of its commercialization and the breadth of its types, making it the crown jewel of the leisure industry.

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1)Why do humans love playing games

According to data from Statista, the number of gamers worldwide has surpassed 2.5 billion, approaching 3 billion. So how do games manage to attract more than a third of the global population? The core reason can be summarized as meeting human needs and weaknesses from multiple aspects.

1. Escape Reality and Restart Life: The game provides a place 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 for those 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 students and workers in real life who struggle day after day with their studies and jobs, the charm of games lies in the rich reward systems and timely reward mechanisms they provide. After putting in effort, leveling up by defeating monsters, and completing challenges, players quickly acquire new skills, unlock new levels, or receive new items. This incentive mechanism can inspire people to keep moving forward.

4. Low-cost free exploration: Many games offer rich virtual worlds, allowing players to explore unknown areas, interact with NPCs and other players, and advance the storyline. This satisfies humanity's innate desire for adventure and exploration. In the real world, however, due to constraints of money, energy, time, and geographical location, exploration compared to the game world would significantly increase costs.

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

By targeting certain weaknesses of individuals, games can cleverly meet the needs and preferences of different users, thereby playing a good role in both the breadth of the covered audience and providing a depth of immersive experience.

2) Current Status and Development of Traditional Games

Next, let's briefly understand the current situation of the traditional gaming industry.

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

According to Newzoo's data, role-playing and adventure games perform excellently on PC, mobile, and console, both ranking in the top five. Additionally, shooting and battle royale games are very popular on PC and console. On mobile, there is a slight difference, as puzzle and idle games are also quite favored by users.

(# 2. The Predicament of the Traditional Gaming Industry

However, traditional games currently face two major dilemmas: first, the distribution of games is restricted by licensing numbers, and second, the pre-release costs of games are too high, resulting in a slow return on investment and the risk of sunk costs.

1) game release is subject to licensing restrictions

A game license refers to a specific permit 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, to protect minors from inappropriate content and maintain social stability.

For example, in Germany, the content of games is subject to strict scrutiny, particularly focusing on content that may have a negative impact on young people; South Korea and Japan have game rating systems, which are evaluated and issued by relevant national agencies.

In China, the impact of game licensing is even greater. China implements a strict game licensing system, which is overseen by the National Radio and Television Administration. Games need to obtain a license 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 April 2022, when things gradually began to change. In April 2022, 45 game licenses were issued, followed by another batch in September and December. However, during the stagnation period from July 2021 to April 2022, only a few large companies managed to survive, while a large number of small and medium-sized companies faced the outcome of bankruptcy. According to data from the Tianyancha App, more than 14,000 small and medium-sized game companies with registered capital below 10 million were successively deregistered from July to December 2021.

As the world's largest gaming market, China has over 500 million people playing video games. However, obtaining a license has become a pain point for countless Chinese companies. Even with the resumption of license approvals, the contraction or constant adjustment of licenses has become the sword of Damocles for every game project. In the days waiting for the license to be issued, one can hear countless sighs from projects without a financial chain facing closure.

The cost before the issuance of 2( is too high, and it is easy to incur a lot of sunk costs

In the development model of Web2 games, there are upfront human resource and infrastructure costs during the game development phase, idle time costs while waiting for the license approval, and profit sharing can only occur once the license is released, the game is launched, and commercial revenue is generated.

It is not hard to find that a large amount of costs are spent in the upfront stages. Once problems arise during the development stage, license approval stage, or user acquisition stage, all the costs incurred earlier become sunk costs. For a medium