Thank You for this. The diagram on telegram was a 1 second diagram for you to fill in the missing parts. You can still specify "blockchain" as an entity even if each node has a copy of it and it not be seen as "centralized".

This does not still explain how to stop the creation of fake players on my server. Or running 10 game servers on my 1 server with the same 200 fake players on each of the 10 game servers.

You may also run 500+ Virtual Machines on 1 host without requiring a super computer. Internal I/O would not be an issue.
and as i stated, you may even use applications like docker, or if you are an experience developer you could write everything in software on a single machine, run multiple nodes, different ports, different proxies

This is what people will do to break PoN.

You cannot safely and securely confirm in a decentralized way if a server has or has not fake players in which case this will be exploited to gain Xenio coins.

what is the incentive for gamers again?