Opportunities and Challenges 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 is experiencing layoffs and consolidation, soaring development costs, and reduced investment. Game publishing and distribution are becoming increasingly difficult, and new projects struggle to stand out.

However, opportunities and challenges coexist. As digital natives, the consumption power of Generation Z and Generation Alpha 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.

2. Challenges Faced by Issuance

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

Players tend to stick to familiar games or series. In 2023, the top ten games ( by monthly active users ) were all released over seven years ago. In 2024, 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 adjustments to Apple and Google's privacy policies in 2021 had a significant impact on user acquisition strategies for (UA). Although many publishers have found new ways to scale, smaller teams are facing greater competitive pressure.

AI may improve UA efficiency, but it will also lower market entry barriers and exacerbate content oversupply. UGC platforms like Roblox have become testing grounds for independent developers, but they also face challenges in content selection and promotion.

The Web3 gaming market is relatively small, with about 6-7 million active wallet addresses interacting with over 3,000 on-chain gaming protocols. However, the rapid acceleration of the emerging ecosystem has intensified challenges. In 2024, 104 new networks will be launched, while only 263 new Web3 games are released. This has led to a battle for player liquidity, with Web3 projects competing around a limited user base.

Some Web3 companies are exploring new UA models based on blockchain, gaining competitive advantages through innovative incentive mechanisms and on-chain reputation systems. Compared to the saturated T1 market, companies that can leverage blockchain to open up emerging markets may have tremendous opportunities. The Global South is such a region with high growth and a strong recognition of blockchain applications.

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. This vast area is seen as a game market with enormous potential, characterized by a large player base, a primary reliance on mobile devices, and a generally low willingness to pay.

As the younger generation grows and benefits from economic development, the Global South is expected to become a new generation of paying players, driving the game industry to new heights. Here are some characteristics of key markets:

India (India )

• The number of gamers has increased from 44.9 million in 2017 to 466 million, and is expected to exceed 640 million by 2027.
• Market revenue is expected to grow by 13.6% in 2024 to reach $943 million (, and $1.4 billion by 2028.
• Strong preference for mobile games, accounting for 77.9% of total revenue.
• The internet penetration rate has increased from 14% in 2015 to 52%, with significant room for growth remaining.

) Southeast Asia ### SEA (

• Game revenue in 2023 is $5.1 billion, expected to reach $7.1 billion by 2028.
• In 2023, there are 277 million gamers, expected to increase to 332 million by 2028.
• Indonesia has the highest mobile game downloads, while Thailand has the highest IAP revenue.
• Community and competitive culture are common characteristics, and word-of-mouth is the main source of information.

) Latin America ### LATAM (

• In 2022, it is estimated that there were 316 million gamers, with Brazil being the most prominent.
• 60% of players in Brazil have played a mobile game at least once in the past six months.
• 43% of Brazilian players engage in in-game spending.
• Brazil has 1,042 game studios, with a total revenue of approximately $251.6 million.

) 非洲###Africa(

• Revenue expected to exceed 1 billion USD in 2024
• 92% of players use mobile phones to play games
• Main challenges: High data costs ) 42% (, hardware prices ) 31% (, and network connectivity issues ) 31% (
• 63% of players make in-game purchases, payment methods vary by region.

) Middle East and North Africa ### MENA (

• In 2023, revenue grew by 4.7%, reaching 7.1 billion USD, far exceeding the global market's increase of 0.6%.
• The compound annual growth rate is expected to reach 9.4% from 2024 to 2030.
• MENA-3) Saudi Arabia, UAE, Egypt ( are core markets, with expected revenue reaching $2.9 billion by 2027.
• Saudi Arabia accounts for 60.6% of the total gaming revenue in MENA and 30.3% of the total number of players.

![Let gamers prove: how KGeN redefines user acquisition])https://img-cdn.gateio.im/webp-social/moments-d3de399cfffbeb740364dfae15a2686b.webp(

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 funds from publishers to users, driving its growth flywheel.

The core of the platform is a decentralized player data network that covers millions of microgame communities )KGeN Tribe (. The network uses "Player Proof" )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( have grown by 1333%, and the total amount of data attributes has 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.

![Let gamers prove: How KGeN redefines user acquisition])https://img-cdn.gateio.im/webp-social/moments-6a684309a3a50aa2f2837ee493f7bb42.webp(

) 4.1 Grassroots Growth

The core of KGeN's growth lies in its grassroots tribes and the network of tribe leaders. Tribes represent thousands of micro-communities that have joined the KGeN ecosystem. 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 recommendations. Tribe leaders earn points by inviting members and having them complete tasks. Approximately 1.7 million KGeN accounts verified through KYC have been 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.

( 4.2 Incentivized 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 while building their PoG reputation score.

Task activities are divided into K-Drops and K-Quests. K-Drops provide automatic real-time validation through the API, while K-Quests undergo a manual verification process. The uniqueness of KGeN lies in combining KGeN Play with the PoG engine to offer high conversion rate target activities.

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

( 4.3 PoG Engine

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

1. Human Proof ) PoH ###: Tracking data points to reduce the possibility of robots.
2. Game Proof ( PoP ): Determine players' participation and game preferences on the KGeN platform.
3. Skill Certification ( PoS ): Recognizing players' abilities, competitiveness, and achievements.
4. Commercial Proof ( PoC ): Identify users' monetization potential
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.

Using the PoG engine, KGeN has launched the "Effective Customer Acquisition Cost" ( eCAC ) framework, charging only active users who reach the middle or bottom of the user funnel. This approach has demonstrated cost advantages in multiple collaborations.

( 4.4 KGeN Token Economics

KGeN economy consists of two core assets: KCash and KGEN tokens. KCash is an off-chain reward currency that can be used for purchases in KStore. KGEN tokens are utility tokens that drive the growth flywheel of the ecosystem.

rKGEN airdrop event before TGE, where rKGEN can be converted 1:1 to KGEN tokens.

The uses of the token include incentives, discounts at the KGeN Store, subscription fees, and more. The staking mechanism allows tribe leaders and issuers to gain additional platform tools and UA advantages.

![Let gamers prove: How KGeN redefines user acquisition])https://img-cdn.gateio.im/webp-social/moments-238d7cd2ae2476494e3b286b5e1f8c37.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 oracle is responsible for storing PoG data, calculating PoG scores, and submitting the scores to the blockchain.

The decentralization of the oracle network is a gradual process, expected to take at least three years. The oracle key is the NFT required to participate in the network, and additional sales may be made available to the public in the future.

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

5. Competitive Landscape

) The King of Advertising Technology: Past and Present

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

• Facebook: Dominates the mobile advertising field through precise user profiling and behavior analysis.
• Applovin: Excels in the mobile UA market by leveraging end-to-end data integration and the AI-driven AXON engine.

Mystplay is one of the fastest-growing reward-based user acquisition platforms in the Web2 space, enhancing user engagement through an AI-driven recommendation engine and rich social features.

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

) 5.2 Web3 Competitive Landscape

The competitors in the Web3 market are mainly divided into two categories: publisher ecosystems and task platforms.

Publisher ecosystems ### such as Ronin and Immutable ( support UA through token subsidies and inflation incentives. Task platforms ) such as Zentry and Carv ### then