The Kingdom Stone is the crystalline concentration of the energy supplies of the starship that brought the dragons to Avalice. For centuries, the kingdoms of Shang Mu, Shang Tu, and Shuigang have depended on it to power their technology.
The Kingdom Stone, during the intro cinematic.
History
Freedom Planet
By the time of Lord Brevon and his army crash landed on Avalice, the Kingdom Stone's power was supposedly fading. Prompting to a seeming energy crisis, Mayor Zao of Shang Mu hired the Red Scarves to assist his soldiers to steal it from its monastery under Shang Tu's protection in order to preserve his city's power and his chance for reelection, just as Lord Brevon murders the King of Shuigang and brainwashes Prince Dail to steal the Kingdom Stone to recharge his dreadnought and leave an Avalice that was on the approach of war. After Sash Lilac convinces the armies of Shang Tu and Shang Mu to unite against Brevon with the Holodragon, a large assault on the dreadnought's refueling station takes place, but not before the dreadnought makes liftoff with only Lilac, Carol Tea, Milla Basset, and Commander Torque getting on. When Carol and Lilac almost succeed in disconnecting the Kingdom Stone from the ship's engines, Brevon forces them to stop their attempt when he turns Milla into a mutant monster and has her attack them. Milla is defeated and presumed dead, but this act only enrages Lilac and Carol and they pursue Brevon to another area of the dreadnought where the final battle takes place. As the dreadnought exploded, the Kingdom Stone was destroyed, only for its energy to reincarnate as a crystalline vortex that hovers over Avalice. The Royal Magister of Shang Tu realizes that the Stone was the reason for emitting limited energy to begin with.
Freedom Planet 2
With the destruction of the Kingdom Stone, the crystal prison holding Merga has been destroyed. It would seem that the stone's power was used to imprison Merga when she grew ruthless and mad with power. Now that she's free, Merga sets out to unleash the ancient super-weapon Bakunawa on the Three Kingdoms.