New Challenges and Opportunities in the Gaming Industry: How KGeN is Reshaping User Acquisition

1. Introduction

The gaming industry has surpassed the film and music sectors in scale, but it has faced severe challenges in recent years. From 2023 to 2024, the industry has encountered waves of layoffs and consolidations, with soaring development costs and a significant reduction in investments.

The distribution and release of games are becoming increasingly difficult. The proliferation of AI content, platform saturation, and players' preference for mature IPs make it hard for new projects to stand out, making it unprecedentedly challenging to acquire highly engaged users.

However, there are still huge opportunities in the industry. As digital natives, Gen Z and Gen Alpha have grown up in the virtual world, and their purchasing power will continue to drive market expansion.

At the same time, the "Global South" market is experiencing explosive growth. Driven by the proliferation of smartphones, improvements in internet infrastructure, and income growth, these regions will become important incremental markets for the gaming industry.

This report will explore the latest challenges in game publishing, analyze the high-growth opportunities in the "Global South," focus on KGeN, a blockchain-based gaming platform, assess the feasibility of Web3 task platforms, and analyze the structural changes in the value distribution of the gaming industry.

2. Challenges Faced in Issuance

One of the biggest challenges facing the current gaming industry is distribution. Changes in consumer habits, adjustments in regulatory policies, lower market access thresholds, and the ongoing saturation of game content have made it more difficult than ever to successfully promote a game.

Players tend to spend most of their time playing familiar games or series, making it difficult for new releases to break through. In 2023, among the top ten games ranked by average monthly active users, all were released over seven years ago, with 60% of players' game time on new games concentrated on series that release sequels each year.

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

The mobile gaming market once had a mature distribution model. The rise of early mobile advertising networks, coupled with the proliferation of smartphones, helped many games achieve hundreds of millions of user growth. However, in 2021, Apple and Google made significant adjustments to their privacy policies, directly impacting 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 the business models of mobile games for (UA). Many publishers have found new ways to expand, but the market is increasingly favoring well-funded companies, putting smaller teams under greater competitive pressure.

Looking ahead, the 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 also face challenges in content screening 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. Furthermore, Web3 games are even directly banned in some key markets.

It is worth mentioning that the distribution status 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.

Furthermore, 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 gaming protocols. However, these figures do not account for a large number of bot accounts, and there are only about 200 protocols that 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. 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, 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 of these issues have ultimately led to a scramble 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 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 advantage through Web3 integration.

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

Among many regions, one that continues to grow at a rate above the average and has shown a high level of recognition for 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 underdeveloped economically, typically located south of industrialized nations. Due to the rapid improvement of internet infrastructure, high smartphone penetration rates, and the growth of 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, mainly relying on mobile devices for gaming, and overall low willingness to pay. Therefore, historically, these markets have often been used by game publishers for soft launch user acquisition testing and frontend data optimization.

However, the younger generation in these regions is the first generation to grow up alongside 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 a new generation of paying players, driving the gaming industry to new heights.

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

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) 印度###India(

Despite starting relatively late, 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 around 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 to exceed $1 billion in 2025. By 2028, it is projected to reach $1.4 billion, with a 5-year compound annual growth rate (CAGR) of 11.1%. This growth is mainly attributed to the improvement in users' 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 gaming, largely due to the country being one of the fastest-growing nations in terms of 5G and having a broad 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, showcasing the rapid rise of the digital economy. At the same time, the internet penetration rate 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 that there is still enormous growth potential in the future.

These technological advancements have been supported by a strong macroeconomic foundation, including an average annual economic growth rate of 7-9% over the past three years, as well as an increase in income levels among the young and rapidly growing middle class.

India's gaming preferences exhibit a unique pattern distinct 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 USD;
• Casual and hyper-casual games follow closely, with total revenue of $700 million;
• The market size for other categories of games is approximately $400 million.

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) 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. In 2023, the gaming revenue in the region reached $5.1 billion, with a year-on-year growth of 8.8%. It 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 it is expected to grow to 332 million by 2028, with a 5-year CAGR of 3.7%.

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 purchases reached a record high of 400 million USD, followed closely by Indonesia at 300 million USD.

Despite the differences among countries in the region, community and competitive culture are common characteristics. Word-of-mouth communication 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 notable:

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

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) 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 dollars 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 the mobile gaming market still has significant growth potential.

In terms of monetization capability, the Brazilian market demonstrates a strong willingness to pay: 43% of players have in-game spending behaviors, with the main motivations including unlocking exclusive content )39%(, character customization )35%(, and game progression )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 fundamental 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, 1,042 game studios in Brazil, with a total revenue of approximately $251.6 million, and the recently passed legal framework that officially recognizes game development as a profession and provides tax incentives and other measures.

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