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

1. Introduction

The gaming industry has surpassed the film and music industries in scale, but in recent years it has faced severe challenges. In 2023-2024, the industry has encountered a wave of layoffs and consolidation, with development costs soaring and investment significantly reduced.

The distribution and publishing of games is becoming increasingly difficult. The proliferation of AI content, platform saturation, and players' preference for mature IPs make it challenging for new projects to stand out, and acquiring high-retention users has become more challenging than ever.

Nevertheless, there are still huge opportunities in the industry. The digital native generation will continue to drive market expansion. At the same time, the "Global South" market 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 value distribution within the gaming industry.

2. Challenges Faced by Issuance

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

Players tend to spend most of their time playing familiar games or series, making it difficult for new releases to break through. In 2023, the top ten games, calculated by average monthly active users (MAU), were all released over seven years ago, and 60% of players' gaming time on new games is still concentrated on series that release sequels every year.

In 2024, the number of new games on Steam reached a record of 19,000, but the games released that year accounted for only 15% of the total gameplay hours by players.

The mobile gaming market once had a mature distribution model, but the privacy policy adjustments in 2021 had a significant impact on publishers' ability to reach target users. Many publishers have found new ways to scale on mobile, but small teams face greater competitive pressure.

AI may make UA campaign management more efficient, but it will also lower market entry barriers, significantly increasing the quantity of content. UGC platforms have become a testing ground for independent developers, but they also face challenges in content curation and promotion.

Web3 games must adhere to stricter policies on mobile, Steam, and console platforms, and are even banned in some key markets. However, the distribution situation on consoles is gradually improving.

The Web3 gaming market is still a niche segment of the gaming industry, with about 6 to 7 million active wallet addresses interacting with over 3,000 on-chain gaming protocols. Only about 200 protocols have more than 100 active on-chain accounts.

Since 2021, the number of new Web3 games has decreased by an average of 45%, while the number of new networks has increased by an average of 187%. In 2024, 104 new networks/ecosystems are set to launch, while only 263 new Web3 games have been released.

Most of these emerging networks have failed to successfully attract new players, leading to a battle for player liquidity. Web3 projects compete for the same limited pool of wallet users, lacking effective means to achieve scalable growth.

A group of Web3 companies is exploring a new UA model based on blockchain. Innovative incentive mechanisms and on-chain reputation systems may become potential avenues for gaining a competitive advantage through Web3 integration.

Many Web3 companies are demonstrating significant product-market fit in emerging markets ( PMF ). Compared to the increasingly saturated T1 market, those businesses that can leverage blockchain global payment networks to tap into emerging markets may have enormous opportunities.

3. Global South(Global South)

The Global South refers to countries and regions that have relatively low levels of economic development, typically located south of industrialized nations. This vast area is seen as an underdeveloped but highly potential gaming market.

The characteristics of the global southern gaming market are: a large player base, a primary reliance on mobile devices for gaming, and overall low willingness to pay. Historically, these markets have often been used for soft launch UA testing and front-end data optimization.

However, the younger generation in these regions is the first generation to grow up alongside smartphones, showing a high preference for gaming content. As this generation ages and benefits from economic development, many believe they will become a new generation of paying players, driving the gaming industry to new heights.

The following are the characteristics of some key markets in the Global South:

(India)

India is rapidly emerging as the largest gaming market in the Global South. The number of gamers was only 44.9 million in 2017, and it has now increased to approximately 466 million, with an expected rise to over 640 million by 2027.

Market revenue is expected to grow by 13.6% in 2024 to reach $943 million, with a breakthrough of $1 billion in 2025 and $1.4 billion by 2028, resulting in a 5-year CAGR of 11.1%. This is mainly attributed to the enhancement of users' in-app purchase habits and an increase in disposable income.

The Indian market has a strong preference for mobile games, benefiting from the rapid growth of 5G and widespread digital payment infrastructure ( UPI ). The internet penetration rate has increased from 14% in 2015 to the current 52%, with significant growth potential in the future.

India's gaming preferences are unique:

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

Market revenue composition:

• Real Money Game ( RMG ) annual revenue of 2 billion dollars
• The total revenue of casual and hyper-casual games is $700 million
• The market size of other categories of games is approximately 400 million dollars.

( Southeast Asia ) SEA ###

Southeast Asia is one of the most mature gaming markets in the Global South. In 2023, gaming revenue reached $5.1 billion, a year-on-year increase of 8.8%. It is expected to reach $7.1 billion by 2028, with a 5-year CAGR of 6.7%. In 2023, there are 277 million gamers, expected to increase to 332 million by 2028, with a 5-year CAGR of 3.7%.

First half of 2024:

• Indonesia's mobile game downloads are the highest, reaching 2.4 billion times (, accounting for 41% of the total downloads in the region ).
• Thailand had the highest IAP revenue, reaching 400 million USD, followed closely by Indonesia at 300 million USD.

Community and competitive culture are common characteristics of the region. Word of mouth is the main source of information, and the best-performing games usually have social features.

The proliferation of smartphones and the development of broadband infrastructure are key factors driving market growth:

• In 2022, the smartphone penetration rate in all major countries exceeded 80%.
• It is expected that by 2026, the average penetration rate will reach 90.1%.

( Latin America ) LATAM ###

Latin America is another major market worth paying attention to, with a large population and a strong gaming culture. In 2022, there were an estimated 316 million gamers, primarily concentrated in Brazil with 110 million players, generating $2.7 billion in gaming revenue.

Characteristics of the Brazilian market:

• 60% of players have played a mobile game at least once in the past six months.
• The penetration rate of smartphones is expected to reach 83% by 2025.
• 43% of players have in-game spending behavior

Brazil will lead the growth of the gaming industry in Latin America, thanks to:

• 140 universities offer more than 4000 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 offers tax incentives and other measures.

( 非洲)Africa(

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

Market Characteristics:

• 92% of players use mobile phones to play games
• Major challenges: high data costs ) 42% ###, hardware prices ( 31% ), and network connectivity issues ( 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 USD. The CAGR is expected to reach 9.4% from 2024 to 2030.

MENA-3) Saudi Arabia, UAE, Egypt ### are core markets:

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

Market drivers: high proportion of young population, increasing internet penetration rate, widespread adoption of new technologies.

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 the funds of publishers to users, driving its growth flywheel.

The core of the platform is a decentralized player data network, covering millions of micro-game communities (KGeN Tribe ). The network employs "Player Proof" ( Proof of Gamer, PoG ) engine, creating a cross-chain player reputation layer, providing publishers with a highly engaged target user group at a cost far lower than many existing platforms.

As more players join the platform and the PoG dataset grows, more partnerships are being established between game studios and publishers. This further drives ecosystem rewards and increases the value for participating players. Since January 2024, the total number of registered accounts has increased by over 700%, MAU has grown by 1333%, and the total amount of data attributes has increased by 992%.

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

( 4.1 Grassroots Growth

The core of KGeN's growth lies in its grassroots tribes and tribe leader network. The tribes represent thousands of micro-communities that have joined the KGeN ecosystem. As of December 2024, KGeN reports a total of 2,525 tribes, of which 152 tribes have more than 100 members.

The tribe is one of the core ways KGeN promotes UA based on recommendations. Tribe leaders earn points by inviting members and having them complete tasks. Approximately 1.7 million KGeN accounts verified through KYC have been obtained through the tribe.

Tribal leaders are not only incentivized to introduce new members, but they must also coordinate tribal activities and maintain community engagement. A portion of the tribe's total revenue flows back to the tribal leaders, which becomes one of the key growth incentive mechanisms for the platform.

KGeN's largest market is currently India, but over 30% of independent active wallets and transactions occur on Kaia, the proprietary blockchain of the LINE messaging application ). LINE's largest markets are Japan, Thailand, Taiwan, and Indonesia, indicating that KGeN has strong growth potential in Asia.

To replicate India's success in other markets in the Global South, KGeN needs to adopt a similar grassroots growth strategy. Collaborating with local gaming micro-communities will gradually expand its reach while creating opportunities to deepen social dynamics.

4.2 Incentivize Participation through KGeN Play

KGeN