Fellas, have you noticed a weird trend? Anything that makes money here either gets monopolized or you can't touch it. Even if it's not illegal, you hardly see regular folks getting involved. Take blockchain games for instance; I've searched high and low for good ones. Aside from the trash like Honor of Kings, it’s just a lineup of endless, uninspired games. I think blockchain gaming could be a solid play if it was legally operated, but it’s also pretty easy to lose cash in it.
Everyone's always saying you can't buy BTC or ETH in the mainland, claiming it's a scam. So why are we pushed to buy stocks instead? I've lost a chunk in stocks over the years too.
So why can't the mainland create a game like Pixels? Let me share what a friend said.
This is a gaming revolution stifled by policy.
I invested in three Chinese blockchain game projects in 2021. Now, all three projects are dead. One even shut down its servers, wiping out all user assets.
That was when I realized for the first time that China may never be able to create a game like Pixels. Not because of a lack of technology, nor because of a lack of smart designers, but because there are some things more powerful than technology and genius. That thing is called the policy environment.
Today, I want to discuss a fact that many overlook. Why can't the world's largest gaming market become the birthplace of blockchain games? Why can innovations like Pixels only be realized by teams in Southeast Asia and globally, but not in China?
The answer is more complex and profound than most people realize.
First, let's understand a basic policy fact. In 2017, the Chinese government banned ICOs. This ban means that any form of token issuance and financing activities are prohibited. Subsequently, exchanges for Bitcoin and Ethereum were shut down. P2P platforms were heavily regulated. The entire cryptocurrency industry in China turned into a gray area.
But that's not all. The real problem arises in the gaming sector. In 2020, the Chinese government began unprecedented regulation of the gaming industry. Minors' gaming time was restricted. In-game purchases were regulated. Game companies were required to conduct strict content reviews.
Then, in late 2021, a new signal emerged. The Chinese government began to explicitly state that they are not interested in 'gamified finance.' Any gameplay involving token rewards, asset trading, or financial incentives began to be regarded as financial products rather than games.
This is the starting point of the death of Chinese blockchain games.
Let me explain what this means. In the West, a game can have an internal economic system. Players can earn tradable assets through the game. This is seen as part of game design. But in China, it's viewed as a channel for financing and money laundering.
A Chinese blockchain game developer, if they want to operate domestically, faces several constraints. They can't allow players to make money through the game. Because 'making money' would be seen as illegal financing. They can't let players trade in-game assets. Because 'trading' might be considered illegal trading. They can't even explicitly say 'this is a blockchain game.' Because the term 'blockchain' is a sensitive word in many contexts.
Do you see the problem? The entire core of Pixels is built on one premise: players own assets, assets can be traded, and assets have real economic value. But all three premises are precisely off-limits in China.
So when I say 'China can't produce Pixels,' I mean that under the existing policy framework, it's not that they can't do it technically, but that they can't do it legally.
But the depth of this issue goes far beyond that.
The second layer I want to discuss is what the policy logic behind this is. Why is the Chinese government so cautious about blockchain games?
If you think from the government's perspective, the answer becomes clear. A game that allows players to make money is essentially creating a parallel economic system. In this system, there is production, circulation, consumption, and investment. There are people making money and people losing money. Some act as labor, while others act as capital.
From the government's perspective, this parallel economic system has several issues. First, it's uncontrollable. Because it's built on blockchain, the government cannot directly intervene in the flow of funds. Second, it's cross-border. Because blockchain is inherently a global network, players can trade and interact with strangers worldwide. Third, it's opaque. Because the characteristics of blockchain are anonymity and untraceability.
From the perspective of a government committed to maintaining financial order and social control, all three characteristics are red flags.
Going further, there's another problem. The economic incentives of blockchain games attract what kind of players? They attract those who want to make money through games. In a country where per capita income is still rising, this attraction is enormous, especially for young people and those in rural areas.
The Chinese government is very sensitive to this. Because once a large population begins to believe 'I can make money through the virtual world,' a series of social problems will arise. People might reduce their working hours to play games. They might invest money they can't afford to lose. They could be scammed. Young people might abandon their studies. Rural populations might give up farming.
From the perspective of social management, all of this is an unacceptable risk.
So, China's ban on blockchain games seems to be not just a financial regulation issue but also a social management issue. The government doesn't want a parallel, uncontrollable, cross-border, economically incentivized virtual world.
This is why, even though China's tech talents can design games like Pixels, they can't launch it in China. The policy framework itself prohibits such games from existing.
Now let's look at this issue from another angle. Pixels can exist because it runs on the Ronin network, which is a global network. Players of Pixels are spread worldwide, coming from different countries and subject to different regulatory frameworks. No single government can unilaterally shut down Pixels. This gives Pixels a level of freedom that Chinese blockchain games can never possess.
But what does this also indicate? It shows that in an era of highly globalized virtual worlds, differing policy frameworks can lead to huge disparities. If a country chooses to completely ban blockchain games, its citizens can still participate in global blockchain games. But they cannot engage in blockchain games developed in their own country. This asymmetry will lead to what consequences?
First, China will lose its innovative leadership in this industry. The smartest game designers globally will go overseas. Chinese capital will flow abroad. Chinese players will use overseas games. But the Chinese government cannot capture the tax revenue and regulatory benefits from this industry.
Second, China will miss an important economic opportunity. Gaming is a multi-trillion-dollar global industry. If blockchain gaming becomes the future of gaming (which is an increasingly clear trend), Chinese game companies will lose competitiveness because they can't engage in blockchain gaming. Tencent and NetEase are trying to layout overseas blockchain games, but they can't do it domestically. It's like racing with one hand tied behind your back.
Third, China will create a 'population outflow.' Not physical, but virtual. A generation of young people will spend their time and money in the global virtual world rather than in their own country's virtual world. This is a strategic failure for a country that wants to build a 'metaverse' or 'virtual economy.'
I previously said China can't produce Pixels; now I want to say more accurately: the Chinese government cannot create a policy environment that allows Pixels to operate domestically. But this isn't due to a lack of technology or imagination, but because different countries have different priorities.
What are China's priorities? It's social stability, controllability, and order. A virtual world that allows civilians to engage in uncontrollable cross-border financial activities does not align with these priorities.
What are the priorities of Western countries? It's innovation, freedom, and market forces. A virtual world full of innovation and cross-border economic activities aligns with these priorities.
This isn't a question of who is right or wrong. It's about different countries making different choices at different stages of development.
But this choice has consequences.
Now let's take a closer look at what would happen if China tried to create a Pixels-style game.
Imagine a Chinese gaming company designing a game as fun as Pixels. When they launch it domestically, first they need to obtain a license. This means going through a complex review process to prove the game content meets policy requirements.
Then, they need to handle the economic system within the game. If there are tradable assets in the game, what is the legal nature of those assets? Are they virtual goods? But virtual goods typically can't be freely traded. Are they digital assets? But digital assets might be considered financial products. Are they game items? But if they are just items, why support trading?
Government departments will ask a series of questions. Are players making money through the game? If they are making money, does this violate laws regarding illegal financing? Is there a gambling component in the game? Such as random drops or card-drawing mechanisms? Can assets be withdrawn for real currency? If so, does this relate to money laundering?
Each question could lead to the game being banned.
Even if developers can answer all these questions, there's another issue. If the game allows international players to participate, the regulation becomes even more complicated. If domestic players and international players are allowed to trade assets, does this involve illegal capital inflow and outflow?
So, a Chinese company can hardly create a fully functional Pixels. They can make a visually appealing farm game. But that game must remove all economic incentives, all asset trading, all cross-border interactions. Once you take those out, you're no longer making Pixels. You're just making an ordinary casual game.
And China already has enough ordinary casual games.
This is the real dilemma of China's blockchain games. It's not a technical issue, not a design issue, but an institutional issue. The policy framework fundamentally contradicts the characteristics of the game.
So, is there a chance that policies will change?
I think it's unlikely in the short term. Because changing this policy requires the government to alter its view of the virtual economy. And this change is not a simple decision; it involves assessing the impact on the entire society.
But it's not entirely impossible. One potential path is that the government might create a 'regulatory sandbox.' Allow certain regions or types of games to experiment with blockchain gaming. For example, a pilot area might be established in Shenzhen or Shanghai, allowing companies to launch limited blockchain game features. The government can control risks through strict KYC (Know Your Customer), AML (Anti-Money Laundering), and real-name account systems.
But even if they do this, there will be other issues. Because players can always shift to overseas games. Government control is always limited.
So, my conclusion is: in the short term, China will not have its own Pixels. In the long term, there may be some experimental projects, but there won't be complete freedom.
And what does this mean?
This means the global gaming industry is splitting. In the West and Southeast Asia, blockchain games will continue to develop, becoming more mature and mainstream. Players will spend more and more time and money in games like Pixels. Creative talents will be attracted to this industry. Capital will flow into this industry.
But in China, players will be confined to the world of traditional games. Although China will still be a huge gaming market, it will gradually lose its cutting-edge position. It will become a conservative, highly censored, and independently operating gaming market.
In the long run, this is detrimental to China's gaming industry. Because the future forms of games are likely to resemble Pixels. A virtual world with real assets, supporting trading, and globally interconnected. If Chinese game companies cannot compete in this world, they will lose their competitive edge.
I previously mentioned that all three Chinese blockchain games I invested in are dead. One even wiped out user assets directly. Do you know why? Because they tried to please both sides. They wanted to gain the economic incentives of blockchain games while avoiding policy risks. The result was a product that was neither here nor there. It had neither the fun of traditional games nor the economic appeal of blockchain games. Players left. The project failed.
If a project decides to fully compromise with policies and remove all economic incentives, at least it can become an ordinary good game. But if it tries to sneakily operate blockchain game features, it will violate policies and also fail to make a good game. That's the worst-case scenario.
Now back to Pixels. Why has Pixels been successful?
The core reason is that the development team of Pixels has complete freedom. They don't need to consider the policies of any country. They only need to consider the global policy environment. The Ronin network is global. Players come from all over the world. Regulation comes from different countries, but no single country can completely shut down this game.
This freedom allows the designers of Pixels to focus on one thing: designing a truly fun game. They don't need to consider how to avoid policy risks while retaining economic incentives. They don't need to think about how to meet both government regulations and player expectations. They only need to consider how to create the best gaming experience.
This freedom is the fundamental condition for Pixels' success.
But Chinese blockchain game developers will never have this freedom.
There's a profound asymmetry here. It's not that Chinese developers aren't smart, or that Chinese capital is insufficient, but rather due to the differences in policy frameworks.
So, in the end, I want to say: Why can't China produce Pixels? It's not a matter of capability, but a matter of environmental issues. This environmental issue arises from policy choices. This choice reflects different priorities among countries regarding innovation, freedom, and order.
Pixels has been successful because it operates in a highly free, globalized, and relatively lenient policy environment. This environment exists in Western and Southeast Asian countries but not in China.
So, if you're a game developer in China wanting to create a world-class innovative game, what are your choices? You can choose to compromise and make a game within the policy framework. But you'll lose a lot of innovative space. Or you can choose to go overseas, putting your talents and creativity into a freer environment. But that means leaving home.
That's why more and more Chinese talents are flowing overseas. That's why Chinese investors are heavily investing in overseas blockchain game projects. They have realized this reality: some things can't be done in China. But globally, these things can not only be done but are also changing the entire industry.
This phenomenon has a bigger context. In the age of virtual worlds, differences in policy frameworks will have an increasingly significant impact. Countries that choose freedom and innovation will attract global talent and capital. Countries that choose control and censorship will gradually lose their competitiveness.
Pixels is just a symbol of this larger trend. It represents the future of the virtual world. And this future won't be realized in China.
This is not a prophecy; it's the logical inevitability of policy.
Of course, I'm not saying whether this is right or wrong. I'm just describing a fact. Different countries have different choices. But each choice has a cost. China chose order and control. The cost of this is being in a disadvantaged position in the competition of the virtual world.
And Pixels, like a mirror, reflects this reality.
