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, but it has faced severe challenges in recent years. In 2023-2024, the industry experienced waves of layoffs and consolidation, skyrocketing development costs, and reduced investments. Game publishing and distribution have also become more difficult, and new projects struggle to stand out.

Nevertheless, there are still huge opportunities in the industry. The generation of digital natives 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.

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, lower market entry barriers, and the continuous saturation of game content have made it increasingly difficult to successfully promote new games.

Players tend to spend most of their time on familiar games. In 2023, the top ten games, based on average monthly active users (MAU), were all released over seven years ago. In 2024, despite Steam releasing a record 19,000 new games, the games released that year accounted for only 15% of the total game time of players.

The mobile gaming market once had a mature distribution model, but in 2021, the adjustments to privacy policies by Apple and Google had a significant impact on user acquisition strategies and business models for (UA). Small teams are facing greater competitive pressure.

The widespread adoption of AI may further exacerbate the challenges of content filtering and promotion. Web3 games also need to overcome additional obstacles, such as stricter policy restrictions and bans in certain markets.

The Web3 gaming market is still a niche sub-sector of the entire gaming industry, facing the issue of player liquidity competition. A number of Web3 companies are exploring new user acquisition models based on blockchain to gain a competitive advantage. Compared to the saturated T1 market, those companies that can leverage blockchain to access emerging markets may have significant opportunities.

3. Global South(Global South)

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

The characteristics of the global South gaming market are: a large player base, primarily relying on mobile devices, but with a generally low willingness to pay. As the younger generation grows and benefits from economic development, many believe they will become the new generation of paying players, driving the gaming industry to new heights.

印度(India)

India is rapidly emerging as the largest gaming market in the Global South. In 2017, the number of gamers was 44.9 million, and it has now grown to around 466 million, with projections 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, reaching $1.4 billion by 2028, with a 5-year compound annual growth rate (CAGR) of 11.1%.

The Indian market has a strong preference for mobile games, and the rapid development of 5G and digital payment infrastructure. 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%

Market Revenue Composition:

• Real money game ( RMG ) largest, annual revenue 2 billion dollars
• Total revenue from casual and hyper-casual games is 700 million dollars
• Other category games approximately 400 million US dollars

( Southeast Asia ) SEA (

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

Features:

• Community and competitive culture are common characteristics.
• Word of mouth is the main source of information.
• The best-performing games usually have social features.
• The smartphone penetration rate is high, expected to reach 90.1% by 2026.

) Latin America ### LATAM (

Latin America is another market worth paying attention to, with a large population and a strong gaming culture. In 2022, it was estimated that there were 316 million gamers, with Brazil having 101 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 in the future, thanks to:

• Over 4,000 game-related courses offered by 140 universities.
• 1,042 game studios, with a total revenue of approximately $251.6 million
• New laws recognize game development as a profession and provide tax incentives.

) 非洲###Africa(

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

Features:

• Mobile games account for nearly 90% of the market share
• 92% of players use their phones to play games
• Main challenges: high data costs ) 42% ###, hardware prices ( 31% ), and network connectivity ( 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:

• The revenue is expected to reach 2.9 billion USD by 2027, with a CAGR of 8.3%.
• Saudi Arabia accounts for 60.6% of total game revenue and 30.3% of MENA gamers.

4. What is KGeN

KGeN is a blockchain-based gaming platform that leverages 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 funds from publishers to users, promoting its growth flywheel.

The core of the platform is a decentralized player data network, covering millions of micro-game communities ( KGeN Tribe ). Using "Player Proof" ( Proof of Gamer, PoG ) engine, it creates a cross-chain player reputation layer to provide publishers with a highly engaged target user group.

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 attributes increased by 992%

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

( 4.1 Grassroots Growth

The core of KGeN's growth lies in grassroots tribes and the network of tribal leaders. As of December 2024, KGeN reports a total of 2,525 tribes, of which 152 tribes have more than 100 members.

The tribe is the core method for KGeN to promote user acquisition based on recommendations. Approximately 1.7 million KGeN accounts verified through KYC, ), account for 39% of MAU and 13% of the total registered accounts, with ( acquired through the tribe.

KGeN's largest market currently 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: KGeN how to redefine 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 earn rewards by completing tasks and build their own PoG reputation score.

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

• K-Drops: Automatic real-time validation provided through endpoint API integration
• K-Quests: Conducted through a manual verification process

( 4.3 PoG Engine

The PoG engine is a decentralized player rating system consisting of five core pillars:

1. Human Proof ) PoH ###: Tracking "humanized" data points to reduce the likelihood of bots.
2. Game Proof ( PoP ): Determine player participation and game preferences on the KGeN platform
3. Skill Certificate ### PoS (: Recognizing players' abilities, competitiveness, and achievements.
4. Commercial Proof ) PoC (: Identifying the monetization potential of users
5. Social Network Proof ) PoSN (: Mapping the scale and influence 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 MAU.

![Let gamers prove: How KGeN redefines user acquisition])https://img-cdn.gateio.im/webp-social/moments-238d7cd2ae2476494e3b286b5e1f8c37.webp(

) 4.4 KGeN Token Economy

The KGeN economy consists of two core assets: KCash and KGEN tokens.

KGEN Token Distribution:

• Community allocation of 40% unlocks 8% at ( TGE
• The team and investors have a four-year lock-up period.
• 12.6% of the total supply will be unlocked at TGE

rKGEN airdrop event, and rKGEN can be converted to KGEN tokens at a 1:1 ratio.

![Let gamers prove: how KGeN redefines user acquisition])https://img-cdn.gateio.im/webp-social/moments-1bbf9a79a3f9f248f26bc4a103343da8.webp(

) 4.5 Oracle Network

The KGeN oracle network is a distributed network composed of permissioned nodes, forming the backbone of the PoG engine. The task of the oracle is to store PoG data, compute PoG scores, and submit the scores to the Aptos blockchain for settlement.

Oracle operators will receive KGEN tokens and stablecoin earnings. The decentralized process is expected to take at least three years.

![Let gamers prove: How KGeN redefines user acquisition]###https://img-cdn.gateio.im/webp-social/moments-e8095eedec89550374d875044adc7f91.webp(

5. Competitive Landscape

) King of Advertising Technology: Past and Present

In the Web2 market, Facebook and Applovin are two typical cases:

Facebook:

• Find a foothold during the late stage of web games and the rise of mobile platforms.
• Occupied nearly 30% in 2014