SatoshiQuest creator says the transactions are done on-chain and the game will reset after finding the loot.
Will this kill his idea? I don't know but; since Lightning Network is there, I guess it would be better for him if he had implement way to use Lightning Network. It would be very efficient and more attracting in my opinion. However, it's a big deal for the bitcoin community. Most of the people have very good idea about Minecraft.