Redefining User Acquisition: How KGeN is Pioneering a New Chapter in the Gaming Industry

1. Introduction

In recent years, although the gaming industry has surpassed the film and music industries in scale, it also faces severe challenges. Between 2023 and 2024, the industry has experienced waves of layoffs and consolidations, skyrocketing development costs, and significant reductions in investment. Additionally, game publishing and distribution have become increasingly difficult, with the proliferation of AI content, platform saturation, and players' preference for mature IPs making it hard for new projects to stand out.

However, opportunities and challenges coexist. The Gen Z and Gen Alpha groups, as digital natives, will continue to drive market expansion. At the same time, the long-ignored "Global South" market is experiencing explosive growth, and is expected to 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 in the gaming industry today is distribution. Changes in consumer habits, adjustments in regulatory policies, lower barriers to market entry, and content saturation make it increasingly difficult to successfully promote games. Players tend to spend most of their time on familiar games, making it hard for new titles to break through. In 2023, the release dates of the top ten games ranked by average monthly active users all exceeded seven years.

The mobile gaming market once had a mature distribution model, but the adjustments to privacy policies by Apple and Google in 2021 directly affected how publishers reach their target users. Although mobile advertising still exists, user acquisition strategies and business models have been significantly impacted.

Although AI can improve the efficiency of UA投放 management, it also lowers the market entry threshold, exacerbating the issue of content oversupply. The Web3 gaming market faces additional obstacles, such as strict policy restrictions on mobile, Steam, and console platforms, as well as direct bans in certain key markets.

Currently, the Web3 gaming market remains niche, with around 6-7 million active wallet addresses interacting with over 3,000 on-chain game protocols. However, there are only about 200 protocols that truly have more than 100 active on-chain accounts. Compared to the total number of over 3 billion gamers worldwide, this market size is relatively small and faces challenges brought about by the surge of emerging ecosystems.

Under numerous challenges, a group of Web3 companies is exploring a new user acquisition model based on blockchain. Innovative incentive mechanisms and on-chain reputation systems have become potential ways for these companies to gain competitive advantages through Web3 integration.

3. Global South

The Global South refers to countries and regions with relatively low levels of economic development, typically located south of industrialized countries. This vast area is seen as a gaming market with significant potential, characterized by a large player base that primarily relies on mobile devices for gaming, but with a generally low willingness to pay.

The younger generation is the first group to grow up alongside smartphones and has a very high preference for game content. As this generation ages and benefits from economic development and increased income, many believe that they will become the 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 about 466 million, expected to exceed 640 million by 2027. Market revenue is projected to grow by 13.6% in 2024 (reaching $943 million), surpassing $1 billion in 2025, and reaching $1.4 billion in 2028, with a 5-year compound annual growth rate of 11.1%.

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

India's gaming preferences exhibit a unique pattern:

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

From the composition of market revenue:

• Real Money Gaming (RMG) is the largest segment, generating annual revenue of $2 billion.
• Casual and hyper-casual games follow closely behind, with total revenue of $700 million.
• The market size for other category games is approximately $400 million.

Southeast Asia (SEA)

Southeast Asia (comprising Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam) is one of the most mature gaming markets in the Global South. In 2023, the region's gaming revenue reached $5.1 billion, an 8.8% year-on-year increase, and it is expected to grow to $7.1 billion by 2028, with a compound annual growth rate of 6.7% over five years. In 2023, Southeast Asia has 277 million gamers, and this number is projected to rise to 332 million by 2028.

Indonesia has the highest mobile game downloads at 2.4 billion (accounting for 41% of the region's total downloads); Thailand has the highest in-app purchase (IAP) revenue at $400 million, followed closely by Indonesia at $300 million.

Community and competitive culture are common characteristics of the region. Word-of-mouth is the primary source of information, and the best-performing games typically have social features. The popularity of smartphones and the development of broadband infrastructure are key factors driving market growth.

Latin America (LATAM)

Latin America is another market worth noting, with a large population and a strong gaming culture. In 2022, the region was estimated to have 316 million gamers, with Brazil having 101 million players, generating $2.7 billion in gaming revenue.

The Brazilian market shows a strong preference for mobile games:

• 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.

In terms of monetization ability, the Brazilian market demonstrates strong payment habits: 43% of players engage in in-game spending.

The Brazilian market will continue to dominate the growth of the Latin American gaming industry in the future, thanks to a large number of universities offering game-related courses, numerous game studios, and government support policies.

Africa

The African gaming market is at a critical development stage, with revenues expected to exceed $1 billion in 2024. Mobile games account for nearly 90% of the market share, and 92% of African players use their mobile phones to play games.

The main challenges include high data costs, expensive hardware prices, and network connectivity issues. Payment systems are both a challenge and an opportunity, with 63% of players engaging in in-game purchases, 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 a revenue growth of 4.7% in 2023, reaching 7.1 billion dollars. The compound annual growth rate is expected to reach 9.4% from 2024 to 2030.

MENA-3 (Saudi Arabia, UAE, Egypt) is the core market in the region, with expected revenues reaching $2.9 billion by 2027. Market drivers include a high proportion of young people, a significant increase in internet penetration, and the 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 incentivized task platform, and a decentralized reputation system to drive user engagement across different games. Unlike other User Acquisition (UA) platforms, KGeN returns the publisher's funds to users, propelling its growth flywheel.

The core of the platform is a decentralized player data network that covers millions of micro-game communities (KGeN tribes). This network utilizes a "Proof of Gamer" (PoG) engine to create a cross-chain player reputation layer, providing publishers with a highly engaged target user base at a cost far lower than many existing platforms.

Since January 2024, KGeN's growth flywheel has shown significant results, with the total number of registered accounts increasing by over 700%, monthly active users (MAU) growing by 1333%, and the total data attributes increasing 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. The 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 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 methods for KGeN to drive user acquisition based on recommendations. Tribe leaders earn points by inviting members and having them complete tasks, and these points are counted towards the KGeN leaderboard. Approximately 1.7 million KGeN accounts verified through KYC were acquired through tribes.

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

4.2 Incentivize participation through KGeN Play

KGeN Play is the frontend interface where most players on the platform participate, and all reward tasks are published here. Users can access KGeN Play through the PC portal or mobile app.

When an account is created, the system will automatically create a blockchain wallet in the background to store all of the user's assets as well as non-tradable player reputation NFTs. The KGeN wallet supports multi-chain and gasless transactions, mainly used for checking balances, viewing transaction history, and making withdrawals.

Users can earn rewards by participating in the K-Drops and K-Quests tasks and activities published on the KGeN Play portal. K-Drops provide automatic real-time verification through API, while K-Quests undergo a manual verification process.

4.3 PoG Engine

The PoG engine is a decentralized player scoring system hosted by a distributed network of 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, building a multifaceted cross-chain reputation system.

The five core pillars are divided into:

• Proof of Humanity (PoH): Tracking various data points to reduce the likelihood that users are bots.
• Proof of Play (PoP): Determines the player's engagement with the KGeN platform and the types of games they have played.
• Skill Proof (PoS): Recognizes players' abilities, competitiveness, participation, and achievements that grow over time.
• Business Proof