New Trends in the Gaming Industry: How KGeN is Reshaping User Acquisition Models

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 waves of layoffs and consolidation, with soaring development costs and a significant reduction in investment.

The distribution and publishing 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 acquiring highly engaged users has become an unprecedented challenge.

Nevertheless, there are still huge opportunities in the industry. Gen Z and Gen Alpha, as digital natives, are growing up in a virtual world, and their purchasing power will continue to drive market expansion.

At the same time, the "Global South" market, which has long been overlooked, is experiencing explosive growth. Driven by the proliferation of smartphones, improvements in internet infrastructure, and rising incomes, these regions are set to become significant incremental markets 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 aimed at reshaping the incentive mechanisms between publishers and players. We will also evaluate the feasibility of Web3 task platforms and analyze the structural changes in the distribution of value within the gaming industry.

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 have made it increasingly difficult to successfully promote a game.

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

In 2024, despite Steam welcoming the release of 19,000 new games, the games released that year only accounted for 15% of the total gaming hours of players.

The mobile gaming market once had a more mature distribution model. The rise of early mobile advertising networks, combined with the popularity of smartphones, helped many games achieve hundreds of millions of user growth and generate billions of dollars in annual revenue. However, in 2021, Apple and Google made significant adjustments to their privacy policies, directly affecting how publishers reach their target users.

Although these changes have not ended mobile advertising, they have indeed had a significant impact on user acquisition strategies and mobile game business models. 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.

Looking to the future, the industry environment seems difficult to improve. AI can make UA campaign management more efficient, but it also lowers 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 widespread adoption 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. Furthermore, Web3 games are even directly banned in some key markets.

It is worth mentioning that the distribution status of Web3 games on consoles is gradually changing. The recent release of "Off The Grid" has set a precedent for Web3 games entering this market, which was once considered a "forbidden zone". We look forward to more games developing along this path in the future.

In addition, the Web3 gaming market remains 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 game protocols. However, it is important to note that this data does not exclude the large number of bot accounts that exist in the Web3 space, 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 ), and the challenges it faces have been further exacerbated by the surge of emerging Web3 gaming ecosystems over the past two years. Game7 data indicates that although the number of new Web3 games has decreased by an average 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 have been announced to go live, while only 263 new Web3 games have been released during the same period.

The problem is that most of these emerging networks have failed to successfully attract new players. All these issues ultimately lead to a competition for player liquidity. As competition in the entire gaming market intensifies, Web3 projects are competing for the same limited pool of wallet users, and they have little 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 a competitive edge through Web3 integration.

Many Web3 companies are demonstrating 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 global payment networks and truly open up emerging markets may have significant growth opportunities.

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

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3. Global South)Global South(

The Global South is a term used to describe countries and regions that are relatively low in economic development, usually located south of industrialized nations. Due to rapid improvements in internet infrastructure, high smartphone penetration, and growing disposable income, this vast area 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. Historically, these markets have often been used by game publishers for soft launch 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 some key markets in the Global South, highlighting their importance in the future of the gaming industry.

) 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 this figure 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, and will exceed $1 billion in 2025, with an estimated $1.4 billion by 2028. The 5-year compound annual growth rate (CAGR) is projected to be 11.1%. This growth is mainly attributed to the improvement in users' in-app purchase habits, as well as 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 thanks to the country being one of the fastest-growing nations in terms of 5G and having a comprehensive digital payment infrastructure—Unified Payment Interface ) UPI ###. The transaction volume of UPI has increased from 10.78 billion in 2019 to 83.75 billion in 2023, demonstrating the rapid rise of the digital economy. At the same time, internet penetration has also seen significant improvement, rising from 14% in 2015 to the current 52%. Although still lower than other major gaming markets in the Global South, this indicates considerable growth potential in the future.

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

India's gaming preferences exhibit a unique pattern that differs 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 composition of market revenue, 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, with total revenue of $700 million.
• The market size for other types of games is approximately 400 million USD.

( Southeast Asia ) SEA (

Southeast Asia ) SEA ( consists 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, game revenue in the region reached $5.1 billion in 2023, an increase of 8.8% year-on-year, 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 had 277 million gamers, and this number 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, accounting for 41% of the total downloads in the region.
• Thailand's IAP) in-app purchase revenue reached 400 million USD, followed closely by Indonesia with 300 million USD.

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

Similar to most countries in the Global South, the penetration 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 e-sports sector. In 2022, the region was estimated to have 316 million gamers, with players primarily concentrated in Brazil, which had 101 million players that year and generated 2.7 billion USD 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 smartphone penetration rate is expected to reach 83% by 2025, indicating that there is still significant growth potential in the mobile gaming market.

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

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