Mind the payment-channel case:

• Parties A and B lock the state of their balances, S0, on the blockchain.

• A makes a transaction by updating the state to S1, signing it and sending to B.

• B makes a transaction by updating the state to S2, signing it and sending to A.

That can go on and on indefinitely. Now, suppose, instead of payment-channel, we're trying to implement a chess game off-chain. They bet $50 on the outcome.

• Players A, B init a new game on the blockchain and lock the board state, S.

• Player A performs a move by updating the board state to S1, signing it, sending to B.

• Player B checks A's move was valid, performs a transaction the same way.

That, again, goes on for a while. As soon, though, as A performs a move that is clearly advantageous to him - say, capturing B's queen - B will just not sign anything on top of A's move, forcing him to continue on the blockchain.

Does that mean that state-channels only work for transactions that affect the sender negatively?