New 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, and the overall trend is still on the rise, but it has faced severe challenges in recent years. After a record growth during the pandemic, the industry encountered waves of layoffs and consolidation in 2023-2024, with skyrocketing development costs and a significant reduction in investment.

The release and distribution of games are becoming increasingly difficult. The proliferation of AI content, platform saturation, and players' preference for established IPs make it challenging for new projects to stand out and acquire highly engaged users has become an unprecedented challenge.

Nevertheless, there are still enormous opportunities in the industry. The purchasing power of digital natives Gen Z and Gen Alpha 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.

The first half of this report explores the latest challenges in game publishing and analyzes the high-growth opportunities in the "Global South." The second half focuses on KGeN - a blockchain-based gaming platform designed to reshape 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 facing the gaming industry today is distribution. Changes in consumer habits, adjustments in regulatory policies, lower market entry barriers, and the continuous saturation of game content have made it more difficult than ever to successfully promote a game.

Players tend to spend most of their time on familiar games or series, making it difficult for new releases to break through. In 2023, the top ten games by average monthly active users (MAU) were all released more than seven years ago, and 60% of players' gaming time on new games is still concentrated on series that release sequels every year.

In 2024, despite Steam welcoming a record 19,000 new game releases, the games released that year only accounted for 15% of the total playtime of players.

The mobile gaming market once had a more mature distribution model. The rise of early advertising networks and the popularity of smartphones helped many games achieve user growth in the hundreds of millions. However, in 2021, Apple's and Google's significant adjustments to privacy policies directly affected the way publishers reach their target users.

Although these changes did not end mobile advertising, they did have a significant impact on user acquisition (UA) strategies and the business models of mobile games. Many publishers have found new ways to scale on mobile, but the market is increasingly favoring well-funded companies, putting smaller teams under greater competitive pressure.

The future industry environment seems difficult to improve. AI can make UA campaign management more efficient, but it will also lower the market entry threshold, leading to a significant increase in content quantity. UGC platforms have become a common testing ground for independent developers, but they themselves also face challenges in content selection and promotion, and the proliferation of AI will only exacerbate these issues.

The Web3 gaming market faces additional obstacles. In addition to the aforementioned challenges, Web3 games must comply with stricter policies on mobile platforms, Steam, and console platforms. Moreover, Web3 games are even directly banned in some key markets such as South Korea and China.

It is worth mentioning that the distribution of Web3 games on the console side is gradually changing. The recent release of "Off The Grid" has set a precedent for Web3 games entering this market, and we look forward to more games being able to develop along this path in the future.

The Web3 gaming market is still a niche sub-sector of the entire gaming industry, with approximately 6 to 7 million active wallet addresses interacting with over 3,000 on-chain gaming protocols. However, it should be noted that this data does not exclude a large number of bot accounts, and only about 200 protocols truly have more than 100 active on-chain accounts.

For such a relatively small market (, the total number of global gamers exceeds 3 billion ), the challenges it faces have been further exacerbated by the surge of emerging Web3 gaming ecosystems over the past two years. According to Game7 data, although the number of new Web3 games has averaged a decline of 45% since 2021, the number of new networks has increased by an average of 187% during the same period. In 2024 alone, 104 new networks/ecosystems are announced to be launched, while only 263 new Web3 games were released in the same period.

The problem is that most of these emerging networks have failed to successfully attract new players. All of these issues ultimately lead to a competition for player liquidity. As competition in the gaming market intensifies, Web3 projects are competing for the same limited pool of wallet users, and they have almost no effective means to break through this limitation and achieve scalable growth.

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

Many Web3 companies have shown significant product-market fit in emerging markets ( PMF ). Compared to the increasingly saturated T1 market dominated by Web2 giants, those companies that can leverage blockchain's global payment networks and truly open up emerging markets may have tremendous growth opportunities.

Among many regions, one that continues to grow at a rate above the average and has demonstrated a high level of recognition for blockchain applications is the Global South (.

3. Global South)Global South(

The Global South is a term used to describe countries and regions with 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 vast region is often seen as an underdeveloped yet highly potential gaming market.

The characteristics of the gaming market in the Global South are: a large player base, a primary reliance on mobile devices for gaming, and a generally low willingness to pay. Therefore, historically, these markets have often been used by game publishers for soft launches, user acquisition testing, and front-end data optimization.

However, the younger generation in these regions is the first generation to grow up with smartphones, and they have a strong preference for gaming content ), including games, video content, and esports (. As this generation ages and benefits from economic development and increased income, many believe they will become the new generation of paying players, driving the gaming industry to new heights.

The following are the characteristics of key markets in the Global South, highlighting their importance in the future gaming industry.

) India (India )

Despite a relatively slow start, India is rapidly emerging as the largest gaming market in the Global South. In 2017, the number of gamers in the country was only 44.9 million, but it has now grown to approximately 466 million, and it is expected to exceed 640 million by 2027.

Market revenue is expected to grow by 13.6% in 2024 to reach $943 million, breaking $1 billion in 2025, and is projected to reach $1.4 billion by 2028, with a 5-year compound annual growth rate (CAGR) of 11.1%. This growth is mainly attributed to the improvement in user in-app purchase habits and the increase in disposable income nationwide leading to a rise in average revenue per user (ARPU).

The Indian market has a strong preference for mobile games, largely due to the country being one of the fastest-growing in terms of 5G globally, and having a wide digital payment infrastructure - Unified Payment Interface ### UPI (. The volume of UPI transactions has grown from 10.78 billion in 2019 to 83.75 billion in 2023, showcasing the rapid rise of the digital economy. At the same time, the internet penetration rate has also significantly increased, rising from 14% in 2015 to the current 52%. Although it is still lower than other major gaming markets in the Global South, it indicates that there is still enormous growth potential in the future.

These technological advancements have strong support from macroeconomic fundamentals, including an average annual economic growth rate of 7-9% over the past three years and an increase in income levels among a young and growing middle class.

India's gaming preferences demonstrate a unique pattern different from other major markets:

• Mobile games dominate, contributing 77.9% of total revenue;
• PC games and console games account for only 14.5% and 7.7%.

From the perspective of market revenue composition, the revenue distribution of different types of games is as follows:

• Real Money Games ) RMG ( is the largest niche market, with an annual revenue of $2 billion;
• Casual and hyper-casual games follow closely behind, with total revenue of $700 million;
• The market size of other categories of games is approximately 400 million dollars.

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

) Southeast Asia ( SEA )

Southeast Asia ( SEA ) is composed of Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, and is one of the most mature gaming markets in the Global South. According to Niko Partners data, the gaming revenue in the region reached $5.1 billion in 2023, a year-on-year growth of 8.8%, and is expected to grow to $7.1 billion by 2028, with a 5-year compound annual growth rate ( CAGR ) of 6.7%. In 2023, Southeast Asia has 277 million gamers, and this is expected to grow to 332 million by 2028, with a 5-year CAGR of 3.7%.

According to Sensor Tower's report for the first half of 2024:

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

Despite the differences among countries in the region, community and competitive culture are common characteristics. Word-of-mouth is the primary source of information, and the best-performing games usually have social features.

Similar to most countries in the Global South, the penetration rate of smartphones and the development of broadband infrastructure are key factors driving market growth. Southeast Asia is particularly prominent:

• In 2022, the smartphone penetration rate in all major countries exceeded 80%;
• It is expected that by 2026, the average penetration rate will reach 90.1%.

) Latin America ###LATAM(

LATAM) is another major market worth paying attention to, with a large population and a strong gaming culture, especially in the esports sector. In 2022, it was estimated that the region had 316 million gamers, but players were mainly concentrated in Brazil, which had 101 million players that year and generated $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, indicating that there is still considerable growth potential in the mobile gaming market.

In terms of monetization capabilities, the Brazilian market demonstrates strong payment habits: 43% of players have in-game consumption behavior, with main motivations including unlocking exclusive content (39%), character customization (35%), and game progress (30%). This indicates that a mature market is moving beyond basic monetization models. These consumption patterns suggest that the market is maturing, gradually evolving from basic monetization models to more complex gaming economies.

The Brazilian market will continue to dominate the growth of the Latin American gaming industry in the future, mainly due to: 140 universities nationwide offering more than 4,000 game-related courses, a total of 1,042 game studios across Brazil with total revenue of approximately $251.6 million, and the newly passed legal framework that officially recognizes game development as a profession and provides tax incentives and other measures.

( 非洲)Africa###

The African gaming market is at a critical stage of development, with revenues expected to exceed $1 billion in 2024, showing steady growth compared to $863 million in 2022. The core driver of this market is mobile gaming, which accounts for nearly 90% of the market share, reflecting both the realities of infrastructure and aligning with