Currently in R&D
In Shards, the programming language that glues together the Creation OS, execution is completely recordable and can be hashed. This will allow users to play games in real time, at native speeds. Furthermore, nodes will be able to lazily evaluate at the end of a match, or at a specific moment in time, if players were cheating and so dispute the result of the game itself.
For example, you will be able to run a whole dungeon without doing any transactions with the blockchain. Only at the end Fragnova validating nodes will be triggered, to make sure players did not cheat, and will "confirm" the loot they gathered during the dungeon run.
As a bonus, certain paths of execution will be written directly in STARK primitives. This not only enables simple forward "challenging" the game state, or protest against cheating during the course of the game, but actually validate something in real time before moving forward. Additionally, this can be done without waiting for transactions or any other bottleneck (VMs, etc).
While on-chain storage is a powerful feature, not every item needs to be on-chain. In fact, the majority of game or virtual world items are disposable. If everything is stored permanently on-chain, those items would literally litter and pollute the ecosystem.
In addition to that, many items just need to be private. For example, in certain games some information needs to be hidden, like what cards a player has in their hand or which items are they carrying. If this information is not hidden, the player's strategy could be easily exposed.
Privacy is also a concern, as many people do not want to reveal all of their assets. To make an analogy, would you point a camera towards your personal closet and let everyone in the world access it? Because that's what most blockchains currently offer.
We are researching and considering a solution that utilize Zero Knowledge proofs. With this approach certain items can exist only at the user level, fully in user's custody, and therefore are private knowledge that can't be accessed by other users. However, there is a need for users to locally store these items and keep them safe. This can be a challenge for many people, especially if there are no tools (software or services) to assist them. The need for these tools could potentially open new business opportunities.
Eventually those items' existence can simply be validated and games will make it available to the players for use. Trading can also happen in a complete peer-to-peer manner, if allowed. This way there will be no litter on-chain, as the network will mostly be used for proving ownership and integrity of said items.