New Challenges and Opportunities in the Gaming Industry: How KGeN is Reshaping User Acquisition

1. Introduction

The game industry has surpassed the film and music industries in scale, but has faced severe challenges in recent years. After record growth during the pandemic, it is experiencing a wave of layoffs and consolidation in 2023-2024, skyrocketing development costs, and a significant reduction in investment.

Issuing and distributing has become increasingly difficult. The proliferation of AI content, saturation of platforms, and player preference for mature IPs make it challenging for new projects to stand out, and acquiring high-retention users has become more challenging than ever.

Despite this, there are still huge opportunities in the industry. The purchasing power of the digital native generation will continue to drive market expansion. At the same time, the "Global South" market, which has long been overlooked, is experiencing explosive growth and will become an important incremental market in the next decade.

This report will explore the latest challenges in game publishing, analyze the high-growth opportunities in the "Global South", focus on KGeN, a blockchain-based gaming platform, assess the feasibility of Web3 task platforms, and analyze the structural changes in the value distribution of the gaming industry.

2. Challenges Facing Issuance

One of the biggest challenges in the current gaming industry is distribution. Changes in consumer habits, adjustments in regulatory policies, lower market entry barriers, and content saturation have made it more difficult to successfully promote games.

Players tend to spend most of their time on familiar games or series. In 2023, the top ten games by monthly active users were all released over seven years ago, and 60% of new game durations are concentrated on series that release sequels every year.

In 2024, Steam will welcome 19,000 new games, but the games released that year will only account for 15% of the total game time.

The mobile gaming market once had a mature distribution model, but the adjustments to privacy policies in 2021 affected how publishers reach users. Many publishers have found new ways to expand, but small teams are facing greater competitive pressure.

The future industry environment is difficult to improve. AI may enhance UA efficiency, but it will also lower entry barriers, exacerbating content oversupply. UGC platforms have become a testing ground for independent developers, but they face challenges in content screening and promotion.

Web3 games still need to overcome additional obstacles, such as strict policies on mobile, Steam, and console platforms, as well as bans in some markets. However, the distribution situation on consoles is gradually improving.

The Web3 gaming market is still a niche sector, with about 6-7 million active wallets interacting with 3,000 on-chain gaming protocols. There are only about 200 protocols that actually have more than 100 active accounts.

The rapid increase of emerging ecosystems has intensified challenges. Since 2021, the number of new Web3 games has averaged a decline of 45%, while the number of new networks has increased by 187%. In 2024, there will be 104 new networks launched, while only 263 new games.

This has led to a liquidity battle among players, with Web3 projects competing around a limited user base, lacking effective methods for achieving scalable growth.

Some Web3 companies are exploring new user acquisition models based on blockchain, leveraging innovative incentive mechanisms and on-chain reputation systems to gain a competitive advantage. Companies that demonstrate significant product-market fit in emerging markets may have tremendous opportunities.

3. Global South(Global South)

The Global South refers to regions with lower levels of economic development, typically located south of industrialized countries. Due to improvements in internet infrastructure, the proliferation of smartphones, and income growth, this region is seen as a game market with tremendous potential.

The characteristics include a large player base, primarily relying on mobile devices, and an overall lower willingness to pay. Historically, it has often been used for soft launch UA testing and data optimization.

The younger generation is the first group to grow up with smartphones and has a strong preference for game content. As their income increases, they may become the new generation of paying players, pushing the industry to new heights.

India(

India is rapidly emerging as the largest gaming market in the Global South. The number of players has increased from 44.9 million in 2017 to the current 466 million, and it is expected to exceed 640 million by 2027.

Market revenue is expected to grow by 13.6% in 2024 to reach $943 million ), surpassing $1 billion in 2025, and reaching $1.4 billion by 2028, with a 5-year CAGR of 11.1%.

The Indian market prefers mobile games, benefiting from the rapid proliferation of 5G and UPI digital payment infrastructure. The internet penetration rate has increased from 14% in 2015 to the current 52%, still leaving significant room for growth.

Unique Game Preferences:

• Mobile games account for 77.9% of total revenue
• PC and console games account for only 14.5% and 7.7% respectively.

Composition of income:

• Real money game ( RMG ) maximum, annual revenue 2 billion USD
• $700 million in casual and ultra-casual games
• Other categories approximately 400 million USD

( Southeast Asia ) SEA ###

Southeast Asia is one of the most mature gaming markets in the Global South. In 2023, the gaming revenue reached $5.1 billion, an 8.8% increase year-on-year, and is expected to reach $7.1 billion by 2028, with a 5-year CAGR of 6.7%. In 2023, there are 277 million players, projected to grow to 332 million by 2028.

Indonesia has the highest mobile game download volume, while Thailand has the highest IAP revenue. Community and competitive culture are common characteristics, and word-of-mouth is the primary source of information.

The popularity of smartphones and the development of broadband infrastructure drive market growth:

• In 2022, the smartphone penetration rate in major countries exceeded 80%.
• The average penetration rate is expected to reach 90.1% by 2026.

( Latin America )LATAM###

Latin America is another market worth paying attention to. In 2022, it is estimated that there were 316 million players, with Brazil having 101 million players, generating $2.7 billion in gaming revenue.

Characteristics of the Brazilian market:

• 60% of players have recently played mobile games
• The smartphone penetration rate is expected to reach 83% by 2025.
• 43% of players have in-game spending behavior

Advantages of the Brazilian Market:

• 140 universities offer over 4,000 game-related courses
• 1,042 game studios, with a total revenue of approximately $251.6 million
• The new law recognizes game development as a profession and provides tax incentives.

( 非洲)Africa###

The African gaming market is at a critical stage of development, with revenue expected to exceed $1 billion in 2024.

Market Characteristics:

• Mobile games account for nearly 90% of the market share
• 92% of players use mobile phones to play games
• Main challenges: High data costs ( 42% ), Hardware prices ( 31% ), Network connection ( 31% )
• 63% of players have in-game purchase behavior, and payment methods vary by region.

( Middle East and North Africa ) MENA ###

MENA is the fastest growing gaming market in the world, with a revenue growth of 4.7% in 2023, reaching $7.1 billion. The CAGR is expected to reach 9.4% from 2024 to 2030.

MENA-3( Saudi Arabia, UAE, Egypt ) is the core market:

• Expected revenue to reach $2.9 billion by 2027, CAGR 8.3%
• Saudi Arabia accounts for 60.6% of total game revenue and 30.3% of the total number of players.

4. What is KGeN

KGeN is a blockchain-driven gaming platform that utilizes on-chain and off-chain data, an incentive-based task platform, and a decentralized reputation system to drive user engagement across different games. KGeN returns publisher funds to users, promoting a growth flywheel.

The core of the platform is a decentralized player data network, covering millions of micro-game communities ( KGeN tribe ). It uses the "Player Proof" ( PoG ) engine to create a cross-chain player reputation layer, providing publishers with a highly engaged target user group.

Since January 2024, the total number of registered accounts has increased by over 700%, monthly active users have increased by 1333%, and the total amount of data attributes has grown by 992%. KGeN has become the most active Web3 task and player reputation platform in the market.

The KGeN ecosystem is gradually decentralizing, protecting the PoG engine through a distributed oracle network, providing higher transparency for core stakeholders. Both the oracle network and the KGeN store are powered by KGEN tokens.

( 4.1 Grassroots Growth

The core of KGeN growth is the grassroots tribes and the network of tribe leaders. Tribes represent micro-communities that join the ecosystem, such as colleagues, eSports organizations, influencers, and gaming social groups. As of December 2024, KGeN has 2,525 tribes, of which 152 have more than 100 members.

The tribe is the core way KGeN promotes user acquisition based on referrals. About 1.7 million KGeN accounts verified by KYC ) account for 39% of MAU and 13% of total registered accounts ### are acquired through the tribe.

Tribal leaders are not only incentivized to bring in new members but also need to coordinate activities and maintain community engagement. A portion of the tribe's total revenue will flow back to the tribal leaders, becoming one of the key growth incentive mechanisms for the platform.

KGeN's largest market is India, but over 30% of independent active wallets and transactions occur on Kaia's proprietary blockchain of the LINE messaging application (. This indicates that KGeN has strong growth potential in Asia.

![Let gamers prove: how KGeN redefines user acquisition])https://img-cdn.gateio.im/webp-social/moments-0edfaf9accefa4de93c0fa72feaa027c.webp(

) 4.2 Incentivize participation through KGeN Play

KGeN Play is the front-end interface where most players on the platform participate, and all reward tasks are published here. It can be accessed via the PC portal or mobile application.

When an account is created, the system automatically creates a blockchain wallet in the background to store user assets and non-transferable player reputation NFTs. After reaching the minimum withdrawal threshold, users need to verify their phone number via OTP and gain full control of the wallet.

The KGeN wallet has limited functionality, but the onboarding process is smooth, supporting multiple chains and gasless transactions, mainly used for checking balance, transaction history, and withdrawals.

The task activities are divided into K-Drops and K-Quests, both of which are limited-time participation events with rewards for participants including K-Points, leaderboard-based achievements, K-Cash, or tokens. K-Drops provide automatic real-time verification through API, while K-Quests are verified manually.

The uniqueness of KGeN lies in the combination of KGeN Play and the PoG engine, providing high conversion rate target activities.

4.3 PoG Engine

The PoG engine is a decentralized player rating system hosted by a distributed network of nodes. It consists of five core pillars, each containing five to ten attributes that track player skills, "humanity", engagement, wealth, and social networks, building a multifaceted cross-chain reputation system.

Five core pillars:

• PoH( Human Proof ): Tracking data points that reduce the likelihood of bots, such as KYC status and the number of connected social apps.
• PoP### Game Evidence (: Determine players' engagement with the platform and the types of games they have played.
• PoS) Skill Proof (: Recognizing players' abilities, competitiveness, engagement, and achievements.
• PoC) Commercial Proof (: Identifying User Monetization Potential
• PoSN) Social Network Proof (: Mapping the scale of user social profiles and social graphs

The PoG engine currently includes over 270 million data attributes, coming from 13 million registered accounts and 4.4 million MAUs. Since January 2024, the number of groups has increased.