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

1. Introduction

The gaming industry has surpassed the film and music industries in scale, and overall it continues to grow, but it has faced severe challenges in recent years. In 2023-2024, the industry has encountered layoffs and consolidations, rising development costs, and reduced investments. Game publishing and distribution have also become more difficult, with new projects struggling to stand out.

Nevertheless, there are still huge opportunities in the industry. As digital natives, Generation Z and Generation Alpha 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 for the gaming industry in the next decade.

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

2. Challenges Faced by Issuance

One of the biggest challenges currently facing the gaming industry is distribution. Changes in consumer habits, adjustments in regulatory policies, lowered market entry barriers, and content saturation have made it increasingly difficult to successfully promote a game.

Players tend to spend time on familiar games, making it difficult for new releases to break through. In 2023, the top ten games by monthly active users were all released over seven years ago. In 2024, the number of new games on Steam reached a record high, but games released that year accounted for only 15% of the total gameplay hours.

The mobile gaming market once had a mature distribution model, but in 2021, Apple's and Google's adjustments to privacy policies affected how publishers reach users. Many publishers have found new ways to expand, but small teams face greater pressure.

Looking to the future, AI may make UA deployment more efficient, but it will also lower the entry barrier and exacerbate content oversaturation. UGC platforms have become a testing ground for independent developers, but they also face challenges in content selection and promotion.

Web3 games still need to overcome additional obstacles, such as stricter policy restrictions and bans in some markets. However, the distribution status of Web3 games on consoles is gradually improving.

The Web3 gaming market is still a niche segment, with approximately 6 to 7 million active wallets interacting with over 3,000 on-chain game protocols. However, there are only about 200 protocols that truly have more than 100 active accounts. The surge of emerging Web3 ecosystems has further intensified the challenges, leading to competition for player liquidity.

Some Web3 companies are exploring new UA models based on blockchain, and innovative incentive mechanisms and reputation systems may become competitive advantages. Enterprises that demonstrate PMF in emerging markets may have enormous opportunities, especially in the Global South.

3. Global South

The Global South refers to countries and regions with relatively low levels of economic development. Due to improvements in internet infrastructure, the proliferation of smartphones, and income growth, this region is seen as a game market with great potential.

The characteristics of the global South gaming market are: a large player base, a heavy reliance on mobile devices, and a generally low willingness to pay. The younger generation is the first cohort that has grown up with smartphones and has a strong preference for game content. With economic development and increasing income, they may become the new generation of paying players.

India

India is rapidly emerging as the largest gaming market in the Global South. Revenue is expected to grow by 13.6% in 2024, and will exceed 1 billion USD in 2025. The growth is mainly attributed to an increase in user in-app purchase habits and disposable income.

The Indian market has a strong preference for mobile games, thanks to the rapid spread of 5G and the digital payment infrastructure. The internet penetration rate has increased from 14% in 2015 to 52%, leaving significant room for growth.

India's gaming preferences are unique:

• Mobile games account for 77.9% of total revenue
• PC and console games account for only 14.5% and 7.7%
• Real money gaming is the largest niche market, with an annual revenue of $2 billion.
• Casual games follow closely with a total revenue of 700 million dollars.

Southeast Asia

Southeast Asia is one of the most mature gaming markets in the Global South. Game revenue reached $5.1 billion in 2023 and is expected to increase to $7.1 billion by 2028. There were 277 million gamers in 2023, which is expected to rise to 332 million by 2028.

Indonesia has the highest mobile game downloads, while Thailand has the highest in-app purchase revenue. Community and competitive culture are common characteristics, and word-of-mouth is the main 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 adoption rate is expected to reach 90.1% by 2026.

Latin America

Latin America is another market worth paying attention to, with a large population and a strong gaming culture. In 2022, there were an estimated 316 million gamers, with Brazil accounting for 101 million and generating 2.7 billion dollars in revenue.

The Brazilian market has a high preference for mobile games:

• 60% of players have recently played mobile games
• The smartphone penetration rate is expected to reach 83% by 2025.

43% of Brazilian players have in-game spending behavior, with main motivations including unlocking exclusive content, character customization, and game progression.

Brazil is set to dominate the growth of the gaming industry in Latin America, thanks to:

• 140 universities offer more than 4,000 game-related courses
• 1,042 game studios, total revenue approximately $251.6 million
• New laws recognize game development as a profession and provide tax incentives.

Africa

The African gaming market is at a critical stage of development, with revenues expected to exceed $1 billion in 2024. Mobile games account for nearly 90% of the market share.

92% of African players use mobile phones to play games, while the popularity of computers is 51% and consoles is 31%.

Main challenges:

• High data costs(42%)
• Hardware Price(31%)
• Network connection issue (31%)

The payment system is both a challenge and an opportunity. 63% of players engage in in-game purchases, but payment methods vary by region.

( Middle East and North Africa

MENA is the fastest-growing gaming market in the world, with a revenue increase of 4.7% in 2023, reaching 7.1 billion USD. The compound annual growth rate is expected to reach 9.4% from 2024 to 2030.

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

• Revenue in 2023 increased by 7.8% year-on-year to $1.92 billion
• Expected to reach $2.9 billion by 2028
• Saudi Arabia accounts for 60.6% of total gaming revenue and 30.3% of the total number of players.

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4. What is KGeN

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

The core of the platform is a decentralized player data network, covering millions of microgame communities ( KGeN Tribe ). It adopts the "Proof of Gamer" ( PoG ) engine to create a cross-chain player reputation layer, providing publishers with a highly engaged target user base.

Since January 2024, KGeN has shown significant growth:

• The total number of registered accounts has increased by over 700%.
• Monthly Active Users ( MAU ) increased by 1333%
• Total data attribute volume increased by 992%

The KGeN ecosystem is gradually becoming decentralized, protecting the PoG engine through a distributed oracle network and providing greater 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's growth lies in grassroots tribes and the network of tribe leaders. Tribes represent thousands of micro-communities joining the ecosystem, such as colleagues, e-sports organizations, internet celebrities, and gaming social groups.

As of December 2024, KGeN has 2,525 tribes, of which 152 have more than 100 members. Tribes are the core method through which KGeN promotes user acquisition based on referrals. Approximately 1.7 million KGeN accounts verified through KYC were acquired through tribes.

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

KGeN's largest market currently is India, but over 30% of independent active wallets and transactions occur on Kaia ), the 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. Users can access it through the PC portal or mobile app.

When the account is created, the system will automatically create a blockchain wallet in the background to store user assets and non-tradable player reputation NFTs. Once the minimum withdrawal threshold is reached, users will be prompted to verify their phone number via OTP and gain full control of the wallet.

The task activities are divided into K-Drops and K-Quests:

• K-Drops provides automated real-time verification through API integration.
• K-Quests is conducted through a manual verification process.

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

![Proving Gamers: How KGeN Redefines User Acquisition])https://img-cdn.gateio.im/webp-social/moments-e150f998ddcdedf65ff8cbb46b3245f9.webp(

) 4.3 PoG Engine

The PoG engine is a decentralized player rating system composed of five core pillars, each containing five to ten attributes. These data points track players' skills, "humanity," engagement, wealth, and social networks to build a multifaceted cross-chain reputation system.

Five core pillars:

• PoH### Human Proof (: Reduce the likelihood that users are robots.
• PoP) Game Proof ###: Determine the player's engagement with the platform and the type of game.
• PoS( Skill Proof ): Recognizing player abilities, competitiveness, and achievements
• PoC( Commercial Proof ): Identifying users' monetization potential
• PoSN( Social Network Proof ): Mapping the Scale of User Social Profiles

The PoG engine currently consists of over 270 million data attributes, coming from more than 13 million registered accounts and 4.4 million MAUs. Since January 2024, data from various groups has seen significant growth.

KGeN is leading the "Effective Customer Acquisition Cost" ( eCAC ) alternative UA framework, charging only active users who reach the middle or bottom of the user funnel. This approach can significantly reduce eCAC and improve conversion rates.

5. Competitive Landscape

KGeN is not the only company dedicated to solving the challenges of game distribution. Whether it's expanding UA activities or