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

1. Introduction

The gaming industry has surpassed the scale of film and music, but it has faced severe challenges in recent years. In 2023-2024, the industry experienced a wave of layoffs and consolidation, soaring development costs, and significant cuts in investment. Game publishing and distribution are becoming increasingly difficult, with an overflow of AI content, market saturation, and players' preference for mature IPs, making it hard for new projects to stand out.

However, 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 long-neglected "Global South" market is experiencing explosive growth, and it 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 in 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 make it difficult to successfully promote games.

Players tend to spend most of their time on familiar games or franchises. In 2023, the top ten games by monthly active user rankings were all released over seven years ago. In 2024, despite Steam welcoming 19,000 new games, the games released that year only accounted for 15% of the total gaming time of players.

The mobile gaming market once had a mature distribution model, but the significant adjustments to privacy policies by Apple and Google in 2021 affected how publishers reach their target users. While mobile advertising continues, it has had a major impact on user acquisition strategies and business models.

AI may make UA campaign management more efficient, but it will also lower the market entry threshold, resulting in a significant increase in content quantity. UGC platforms have become a testing ground for independent developers, but they also face challenges in content screening and promotion.

The Web3 gaming market is still a niche field, with about 6 to 7 million active wallet addresses interacting with over 3,000 on-chain gaming protocols. However, there are only about 200 protocols that truly have more than 100 active on-chain accounts. The surge of emerging Web3 gaming ecosystems further exacerbates the challenges.

Under numerous challenges, a group of Web3 companies is exploring new user acquisition models based on blockchain. Innovative incentive mechanisms and on-chain reputation systems are becoming potential avenues for gaining competitive advantages.

3. Global South

The Global South refers to countries and regions that have relatively low levels of economic development, typically located south of industrialized nations. Due to rapid improvements in internet infrastructure, high smartphone penetration rates, and growth in disposable income, this region is seen as a gaming market with enormous potential.

The gaming market in the Global South is characterized by a large player base, a primary reliance on mobile devices for gaming, and a generally low willingness to pay. However, the younger generation has a strong preference for game content, and as the economy develops and incomes rise, they will become the new generation of paying players.

India

India is rapidly emerging as the largest gaming market in the Global South. The number of gamers was 44.9 million in 2017 and has now grown to approximately 466 million, expected to surpass 640 million by 2027. Market revenue is projected to grow by 13.6% in 2024, exceed $1 billion in 2025, and reach $1.4 billion by 2028.

The Indian market has a strong preference for mobile games, thanks to the rapid proliferation of 5G and the improvement of digital payment infrastructure. The internet penetration rate has increased from 14% in 2015 to the current 52%, with significant growth potential still ahead.

Southeast Asia

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, and it is expected to grow to $7.1 billion by 2028. In 2023, there were 277 million gamers, and this number is expected to increase to 332 million by 2028.

Indonesia has the highest mobile game download volume, while Thailand has the highest in-app purchase revenue. Community and competitive culture are common characteristics of the region. The proliferation of smartphones and the development of broadband infrastructure are key factors driving market growth.

Latin America

Latin America is another significant 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 dollars in gaming revenue.

The Brazilian market shows a high preference for mobile games, with 60% of players having played a mobile game at least once in the past six months. 43% of players engage in in-game purchases, with primary motivations including unlocking exclusive content, character customization, and game progression.

Africa

The African gaming market is expected to exceed $1 billion in revenue by 2024. Mobile games account for nearly 90% of the market share. 92% of African players use their mobile phones to play games, while the penetration rates for computers (51%) and gaming consoles (31%) are relatively low.

The main challenges include high data costs, hardware prices, and network connectivity issues. Payment systems are both a challenge and an opportunity, as 63% of players engage in in-game purchases, but payment methods vary by region.

Middle East and North Africa

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

Saudi Arabia, the UAE, and Egypt are the core markets in the region, with expected revenues reaching 2.9 billion dollars by 2027. Market drivers include a high proportion of young population, a significant increase in internet penetration, and the widespread adoption of new technologies.

4. Introduction to 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 enhance user engagement across different games. The core of the platform is a decentralized player data network that encompasses millions of micro-game communities.

KGeN adopts the "Proof of Gamer" (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 grown by 1333%, and the total amount of data attributes has increased by 992%.

4.1 Grassroots Growth

The core of KGeN's growth lies in its grassroots tribes and the network of tribal leaders. 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 user acquisition based on recommendations. Approximately 1.7 million KGeN accounts verified through KYC were obtained through tribes. Tribe leaders are not only incentivized to bring in new members but must also coordinate tribe activities and maintain community engagement.

4.2 Incentivize participation through KGeN Play

KGeN Play is the front-end interface that most players on the platform participate in, where all reward tasks are published. Users earn rewards by completing K-Drops and K-Quests tasks. K-Drops are provided through endpoint API integration for automatic real-time verification, while K-Quests are conducted through a manual verification process.

4.3 PoG Engine

The PoG engine is a decentralized player rating system hosted by a distributed network of nodes. PoG consists of five core pillars: Proof of Humanity (PoH), Proof of Play (PoP), Proof of Skill (PoS), Proof of Commerce (PoC), and Proof of Social Network (PoSN).

The PoG engine currently consists of over 270 million data attributes, sourced from over 13 million registered accounts and 4.4 million MAUs. Utilizing the PoG engine, KGeN is leading an alternative UA framework called "Effective Customer Acquisition Cost" (eCAC).

4.4 KGeN Token Economy

The economy of KGeN consists of two core assets: KCash and KGEN tokens. KCash primarily serves as an off-chain asset for reward currency, while KGEN tokens are the utility tokens that drive the growth flywheel of the KGeN ecosystem.

4.5 Oracle Network

The KGeN oracle network is a distributed network composed of permissioned nodes that together form the backbone of the PoG engine. The task of the oracle is to store PoG data, calculate PoG scores, and submit the scores to the blockchain for settlement.

5. Competitive Landscape

King of Advertising Technology: Past and Present

In the Web2 market, Facebook and Applovin are two typical cases. Facebook successfully utilizes user data to optimize ad placement, while Applovin occupies market share in the mobile UA field through AI-powered tools.

5.2 Web3 Competitive Landscape

The competitors in the Web3 market are mainly divided into publisher ecosystems and task platforms. Publisher ecosystems incentivize user acquisition through token subsidies or inflation, while task platforms aggregate tasks from multiple projects to provide users with a one-stop task participation experience.

5.3 Competitive Analysis

The difference in task platforms mainly lies in their scale and the ability to deliver value-driven results for publishers. KGeN's PoG engine constitutes its key competitive advantage in the high robot traffic market.

6. Future Opportunities

KGeN needs to prove that the value of its user base is reflected not only in player liquidity. It is recommended to focus external rewards on incentivizing users to complete tasks they would not proactively undertake, while avoiding the provision of predictable fixed ROI.

The ability to monetize will be the key to the platform's long-term success. KGeN needs