The Transformation and Challenges of 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. From 2023 to 2024, the industry has encountered layoffs and consolidations, rising development costs, and reduced investments. Game publishing and distribution have become more difficult, and new projects struggle to stand out.

Nevertheless, there are still huge opportunities in the industry. The purchasing power 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 Facing Issuance

One of the biggest challenges in the current gaming industry is distribution. Factors such as changing consumer habits and lower market entry barriers have made it more difficult to successfully push games to millions of users.

Players tend to spend most of their time playing familiar games or series. In 2023, the top ten games were all released over seven years ago. In 2024, despite Steam releasing 19,000 new games, the games released that year only accounted for 15% of the total playtime of players.

The mobile gaming market once had a mature distribution model, but the privacy policy adjustments in 2021 had a significant impact on user acquisition strategies. Although many publishers have found new ways to scale, the market is increasingly favoring well-funded companies.

The Web3 gaming market is facing additional obstacles, such as stricter policy restrictions and bans in certain markets. Currently, there are about 6 to 7 million active wallet addresses interacting with over 3,000 on-chain gaming protocols, but only around 200 of these protocols are truly active.

In 2024, 104 new networks/ecosystems announced their launch, while only 263 new Web3 games were released. This led to a battle for player liquidity, with Web3 projects competing for a limited number of wallet users.

Amid numerous challenges, a group of Web3 companies is exploring new user acquisition models based on blockchain. Innovative incentive mechanisms and on-chain reputation systems may become pathways for these companies to gain a competitive advantage.

3. Global South(Global South)

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

The characteristics of the global South gaming market are: a large player base, primarily reliant on mobile devices, but overall willingness to pay is relatively low. The younger generation is the first group that has grown up with smartphones and has a high preference for game content. As this generation ages, many believe they will become a new generation of paying players, driving the gaming industry to new heights.

(India)

India is rapidly emerging as the largest gaming market in the Global South. Currently, there are approximately 466 million gamers, and it is expected to exceed 640 million by 2027. Market revenue is projected to grow by 13.6% in 2024, surpassing $1 billion in 2025, and reaching $1.4 billion by 2028.

The Indian market has a strong preference for mobile games, thanks to the country being one of the fastest-growing in 5G globally and having a wide digital payment infrastructure. The internet penetration rate has increased from 14% in 2015 to the current 52%, indicating that there is still significant room for growth in the future.

India's gaming preferences exhibit a unique pattern:

• Mobile games dominate, contributing 77.9% of total revenue.
• PC games and console games account for only 14.5% and 7.7% respectively.
• Real money game ( RMG ) is the largest segment, with an annual revenue of $2 billion.
• Casual and hyper-casual games follow closely behind, with total revenue of $700 million.

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, and it is expected to grow to $7.1 billion by 2028. There were 277 million gamers in 2023, with an expected increase to 332 million by 2028.

Indonesia has the highest mobile game downloads, reaching 2.4 billion. Thailand has the highest in-app purchase (IAP) revenue, amounting to 400 million USD, followed closely by Indonesia.

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

Latin America ( LATAM )

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 having 101 million players, generating 2.7 billion dollars in gaming revenue.

The Brazilian market shows a strong preference for mobile games: 60% of players have played at least one mobile game in the past six months. 43% of players have made in-game purchases, with the main motivations including unlocking exclusive content, character customization, and game progression.

非洲(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 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 ( 42% ), hardware prices ( 31% ), and network connection issues ( 31% ). 63% of players have in-game purchasing behavior, but payment methods vary by region.

Middle East and North Africa ( MENA )

The MENA region is the fastest-growing gaming market in the world, with 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.

MENA-3( Saudi Arabia, UAE, Egypt ) are the core markets in the region, with revenue expected to reach $2.9 billion by 2027. Saudi Arabia accounts for 60.6% of total gaming revenue and 30.3% of the total number of gamers in MENA.

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 enhance user engagement across different games. KGeN returns funding 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, the total number of registered accounts has increased by over 700%, and the monthly active users (MAU) have grown by 1333%. The total amount of data attributes has increased by 992%. This has made KGeN the most active Web3 task and player reputation platform in the market.

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

4.1 Grassroots Growth

The core of KGeN's growth lies in its grassroots tribes and 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, with 152 tribes having more than 100 members.

Tribes are one of the core ways KGeN promotes user acquisition based on recommendations. Tribe leaders invite members and let them complete tasks to earn points. Approximately 1.7 million KGeN accounts verified through KYC have been acquired through tribes.

KGeN's largest market currently is India, but over 30% of independent active wallets and transactions occur on Kaia, which is LINE's proprietary blockchain. This indicates that KGeN has strong growth potential in Asia.

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 K-Drops and K-Quests. K-Drops are automatically validated in real-time through the API, while K-Quests are validated through a manual verification process.

4.3 PoG Engine

The PoG engine is a decentralized player rating system hosted by a network of distributed nodes. PoG consists 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.

The five core pillars are divided into "Human Proof" ( PoH ), "Game Proof" ( PoP ), "Skill Proof" ( PoS ), "Business Proof" ( PoC ), and "Social Network Proof" ( PoSN ).

The PoG engine currently consists of over 270 million data attributes, sourced from more than 13 million registered accounts and 4.4 million MAUs. Since January 2024, significant growth has been achieved across all pillar groups.

With the PoG engine, KGeN is leading an alternative UA framework called "Effective Customer Acquisition Cost" ( eCAC ). KGeN only charges active users who reach the middle or bottom of the user funnel, rather than charging for simple impressions or installs at the top of the funnel.

4.4 KGeN Token Economics

The KGeN economy consists of two core assets: KCash and KGEN tokens. KCash primarily serves as an off-chain asset for reward currency, which can be used to purchase in-app purchases, gift cards, or to participate in VIP tournaments and tasks in the KStore.

KGEN token is a utility token that drives the growth flywheel of the KGeN ecosystem. The community allocation accounts for 40%, and the team and investors have a four-year lock-up period.

rKGEN airdrop activity. rKGEN distribution is based on the total amount of users' K-Points, the time spent on the platform, and relevance. Once the token is launched, rKGEN can be converted to KGEN tokens at a ratio of 1:1.

![Let gamers prove: how KGeN redefines user acquisition](