A New Chapter in Game Issuance: How KGeN Reshapes User Acquisition

1. Introduction

The size of the gaming industry has surpassed that of movies and music, but it has faced severe challenges in recent years. In 2023-2024, the industry is experiencing waves of layoffs and consolidation, soaring development costs, and significant reductions in investment. Game issuance and distribution are becoming increasingly difficult, with the proliferation of AI content, saturated platforms, and players' preference for mature IPs, making it harder for new projects to stand out.

Nevertheless, there are still huge opportunities in the industry. The purchasing power of the digital native generation 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 issuance, 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 the value distribution of the gaming industry.

2. Challenges Faced by Issuance

One of the biggest challenges in the current gaming industry is issuance. Changes in consumer habits, adjustments in regulatory policies, lowered market access thresholds, and content saturation have made it more difficult to successfully promote games.

Players tend to spend most of their time playing familiar games or series. In 2023, the top ten games ranked by monthly active users 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 game time of players.

The changes in the privacy policy of mobile advertising networks have also had a significant impact on publishers. While many publishers have found new ways to expand, smaller teams are facing greater competitive pressure.

AI may enable users to manage more efficiently, but it can also lower the market entry threshold and exacerbate content proliferation. UGC platforms have become a testing ground for independent developers, but they also face challenges in content screening and promotion.

The Web3 gaming market remains a niche area, facing additional barriers. Console issuance is gradually changing, but the scale of the Web3 gaming market is still relatively small, with about 6 to 7 million active wallet addresses. The surge of emerging ecosystems has further intensified the challenges, leading to a battle for player liquidity.

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 potential pathways to gaining a competitive advantage.

3. Global South

The Global South refers to countries and regions with relatively low levels of economic development. The characteristics of the gaming market in this region are: a large player base, primarily relying on mobile devices, but overall willingness to pay is low.

The younger generation is the first group to grow up with smartphones, and they have a high preference for gaming content. With economic development and increasing income, they may become the new generation of paying players, driving the industry to new heights.

India

India is rapidly emerging as the largest gaming market in the Global South. Revenue is expected to grow by 13.6% in 2024, surpassing $1 billion in 2025, and reaching $1.4 billion by 2028.

The market has a strong preference for mobile games, thanks to the rapid growth of 5G and the widespread digital payment infrastructure. The internet penetration rate has increased from 14% in 2015 to the current 52%, still leaving significant room for growth.

India's gaming preferences are unique:

• Mobile games account for 77.9% of total revenue
• PC and console games account for only 14.5% and 7.7% respectively.
• Real money gaming is the largest submarket, with an annual revenue of $2 billion.
• The total revenue from casual and hyper-casual games is 700 million USD.

Southeast Asia

Southeast Asia is one of the most mature gaming markets in the Global South. In 2023, game revenue reached $5.1 billion, expected to increase to $7.1 billion by 2028. In 2023, there were 277 million players, expected to grow to 332 million by 2028.

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

The proliferation of smartphones and the development of broadband infrastructure drive market growth:

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

Latin America

Latin America is another market worth paying attention to. In 2022, it was estimated that there were 316 million players, with Brazil having 101 million players, generating 2.7 billion dollars in game revenue.

Characteristics of the Brazilian market:

• 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.
• 43% of players have in-game spending behavior

Brazil will continue to dominate the growth of the Latin American gaming industry in the future, thanks to a完善的游戏教育体系和政策支持.

Africa

The African gaming market is at a critical stage of development, with expected revenues surpassing $1 billion in 2024. Mobile games account for nearly 90% of the market share.

Main challenges: high data costs ( 42% ), hardware prices ( 31% ), and network connectivity issues ( 31% ).

The payment system is both a challenge and an opportunity. 63% of players have in-game purchase behavior, but payment methods vary by region.

Middle East and North Africa

MENA is the fastest-growing gaming market in the world, with a 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, and Egypt ) are core markets, with expected revenues reaching $2.9 billion by 2027. Market drivers include a high proportion of young population, increased internet penetration, and 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. KGeN returns the funds of publishers to users, promoting its growth flywheel.

The core of the platform is a decentralized player data network, covering millions of microgame communities (KGeN tribe ). It uses the "Player Proof" ( PoG ) engine to create a cross-chain player reputation layer, providing publishers with a highly engaged target user group.

Since January 2024, the total number of registered accounts has increased by over 700%, monthly active users have grown by 1333%, and the total amount of data attributes has increased by 992%. KGeN has become 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 core stakeholders. The oracle network and KGeN store are both powered by KGEN tokens.

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 ways KGeN promotes user acquisition based on recommendations. Approximately 1.7 million KGeN accounts verified through KYC have been acquired through the tribe. Tribe leaders are not only incentivized to bring in new members, but they must also coordinate tribe activities and maintain community engagement.

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

To replicate India's success in other markets in the Global South, KGeN is encouraged to adopt a similar grassroots growth strategy. Collaborating with local gaming micro-communities will allow it to gradually expand its reach while creating opportunities to deepen social dynamics.

4.2 Incentivizing participation through KGeN Play

KGeN Play is the front-end interface that most players on the platform participate in, where all reward tasks are published. This typically marks the beginning of the user journey and will serve as the main gateway for users to interact with the platform.

KGeN Play can be accessed via the PC portal or mobile app. When an account is created, the system automatically creates a blockchain wallet in the background to store all user assets and non-transferable player reputation NFTs.

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

4.3 PoG engine

The PoG engine is a decentralized player rating system hosted by a distributed node network. PoG consists of five core pillars, each containing five to ten attributes. These data points track players' skills, "humanization", engagement, wealth, and social networks, building 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, coming from more than 13 million registered accounts and 4.4 million MAUs. Since January 2024, there has been significant growth in data across various groups.

Using the PoG engine, KGeN is leading the "effective customer acquisition cost" ( eCAC ) alternative UA framework. KGeN only charges active users who reach the middle or bottom of the user funnel.

4.4 KGeN Token Economics

The economy of KGeN consists of two core assets: KCash and KGEN tokens. KCash primarily serves as an off-chain asset for reward currency and can also be purchased with fiat currency. KGEN tokens are utility tokens, with 40% allocated for community distribution.

rKGEN airdrop activity. rKGEN can be converted to KGEN tokens at a 1:1 ratio. Some users will be able to start staking rKGEN before the TGE to earn additional token rewards.

The KGEN token will primarily be used for incentives. Over time, it may be more used for consumption in the KGeN Store. Another potential form of consumption could be subscription fees.

In addition to direct token consumption, there will also be token staking. Tribe leaders can stake tokens to increase the member limit and gain additional platform tools. Issuers can also participate in the tiered staking program to acquire more free top users in the UA activities.

4.5 oracle network

The KGeN oracle network is a distributed network composed of permissioned nodes, which will jointly form the backbone of the PoG engine. The task of each oracle is to store PoG data, calculate PoG scores, and submit them to the Aptos blockchain for settlement.

The oracle network will connect a channel