Challenges and Opportunities in Game Issuance: How KGeN Redefines User Acquisition

1. Introduction

In recent years, the gaming industry has surpassed the film and music industries in scale, but it also faces severe challenges. In 2023-2024, the industry experienced layoffs and consolidation, rising development costs, and reduced investment. Game issuance and distribution have become more difficult, and new projects struggle to stand out.

However, opportunities still exist. The digital native generation will continue to drive market expansion. Long-ignored emerging markets are experiencing explosive growth and are expected to become an important increment in the industry over the next decade.

This report will explore the latest challenges in game issuance, analyze the high growth opportunities in emerging markets, and focus on KGeN, a blockchain-based gaming platform, assessing its potential to reshape the incentive mechanisms for publishers and players.

2. Challenges Facing Issuance

One of the biggest challenges in the current gaming industry is issuance. Changes in consumer habits, regulatory adjustments, lower entry barriers, and content saturation have made it extremely difficult to successfully promote new games.

Players tend to spend most of their time on familiar games. The top ten games of 2023, ranked by MAU, have all been issued for more than 7 years, and new games account for only 15% of the total gaming time of players.

The mobile gaming market once had a mature issuance model, but the adjustments to privacy policies in 2021 had a significant impact on user acquisition strategies. Small teams are facing greater competitive pressure.

While AI can improve UA efficiency, it can also lower the entry threshold and exacerbate content oversupply. Web3 games still need to overcome additional obstacles, such as stricter policy restrictions.

The Web3 gaming market size is still relatively small, with about 6 to 7 million active wallets interacting with over 3,000 protocols. The surge of new networks/ecosystems has further intensified competition, resulting in a struggle for limited users.

Some Web3 companies are exploring new UA models based on blockchain, seeking competitive advantages through innovative incentive mechanisms and reputation systems. In emerging markets, companies that can leverage blockchain's global payment network may have significant opportunities.

3. Emerging Market Opportunities

Emerging markets are becoming a new growth engine for the gaming industry. Improvements in internet infrastructure, the proliferation of smartphones, and income growth in these regions bring immense potential to the gaming market.

India

The Indian gaming market is rising rapidly. The number of players has increased from 44.9 million in 2017 to 466 million now, and it is expected to reach 640 million by 2027. Market revenue is expected to exceed $1 billion by 2025 and reach $1.4 billion by 2028.

Characteristics of the Indian market:

• Mobile games dominate, accounting for 77.9% of revenue
• The largest real money gaming, with an annual revenue of 2 billion USD.
• Casual and hyper-casual games follow, with total revenue of 700 million USD.
• Rapid development of 5G and digital payment infrastructure
• The rise of the young middle class

Southeast Asia

Southeast Asia is a relatively mature emerging gaming market. The game revenue is $5.1 billion in 2023 and is expected to reach $7.1 billion by 2028. The number of players will increase from 277 million to 332 million.

Market characteristics:

• Indonesia has the highest download volume, while Thailand has the highest IAP revenue.
• Community and competitive culture prevail
• The penetration rate of smartphones is high, expected to reach 90.1% by 2026.

Latin America

Latin America has a large population and a rich gaming culture. In 2022, it was estimated that there were 316 million players, with Brazil alone having 101 million players generating $2.7 billion in revenue.

Brazil market:

• 60% of players prefer mobile games
• 43% of players have in-game purchases
• Vigorously develop the gaming industry and provide preferential policies.

Africa

The African gaming market is in its early development stage, and revenue is expected to exceed $1 billion in 2024.

Features:

• Mobile games account for 90% of the market share.
• 92% of players use their phones to play games
• Main challenges: high data costs, hardware prices, network connectivity

Middle East and North Africa

MENA is the fastest-growing gaming market in the world, with a revenue of $7.1 billion in 2023, growing by 4.7%.

Features:

• Saudi Arabia, the UAE, and Egypt are core markets.
• High proportion of young population
• Increase in internet penetration rate
• Widespread adoption of new technologies

4. Overview of the KGeN Platform

KGeN is a blockchain-based gaming platform that promotes user participation through on-chain and off-chain data, incentive tasks, and a decentralized reputation system. Its core is a decentralized player data network that covers millions of microgame communities.

KGeN adopts the "Player Proof" ( PoG ) engine to create a cross-chain player reputation layer, providing publishers with a highly engaged target user base. Since January 2024, registered accounts have increased by over 700%, MAU has grown by 1333%, and the total data attributes have increased by 992%.

The KGeN ecosystem is gradually decentralizing, protecting the PoG engine through a distributed oracle network, enhancing transparency. The oracle network and KGeN store are powered by KGEN tokens.

4.1 Grassroots Growth

The core of KGeN's growth lies in its grassroots tribes and the network of tribe leaders. Tribes represent micro-communities that join the ecosystem, such as colleague circles, esports organizations, etc. Tribe leaders earn points by inviting members, which are counted on the leaderboard.

About 1.7 million KGeN accounts verified through KYC were obtained through tribes. India is the largest market for KGeN, but over 30% of active wallets are on the Kaia(LINE blockchain), showing growth potential in Asia.

4.2 KGeN Play

KGeN Play is the main interface for user participation, providing reward tasks. Users can access it through the PC portal or mobile application. The system automatically creates a blockchain wallet to store assets and reputation NFTs.

The tasks are divided into K-Drops( automatic verification) and K-Quests( manual verification), with rewards including K-Points, achievements, K-Cash, or tokens.

4.3 PoG Engine

The PoG engine is a decentralized player rating system composed of five core pillars:

• PoH( Human Proof ): Tracking User Authenticity
• PoP( game proof ): track platform participation
• PoS( Skill Proof ): Assessing Player Capability
• PoC( Commercial Proof ): Identify Monetization Potential
• PoSN( Social Network Proof ): Mapping Social Influence

The PoG engine currently contains over 270 million data attributes, coming from more than 13 million registered accounts and 4.4 million MAUs.

4.4 token economy

KGeN economy includes two assets: KCash and KGEN. KCash is mainly used for purchases in KStore. The KGEN token is used to drive ecosystem growth, with 40% allocated to the community.

The rKGEN airdrop event will take place before the TGE, based on user K-Points, platform time, and relevance. rKGEN can be converted 1:1 into KGEN tokens.

4.5 Oracle Network

The KGeN oracle network consists of licensed nodes responsible for storing PoG data, calculating scores, and submitting them to the blockchain. Oracle operators can earn KGEN tokens and stablecoin rewards.

The oracle secret key is the NFT required to participate in the network. Key holders can delegate it to operators to earn profits.

5. Competitive Landscape Analysis

5.1 Benchmarking in the Web2 Domain

Facebook: In-depth user profile analysis, accurately reaching high-value users. Applovin: end-to-end data integration, providing user valuation and ad optimization. Mystplay: Independent game discovery app, AI-driven recommendation engine.

5.2 Web3 competitors

Mainly divided into the issuance ecosystem and the task platform.

Issuers ecosystem ( such as Ronin, Immutable ): providing token subsidies, inflation incentives, and other UA support.

Task Platform: Aggregates multiple project tasks to provide a one-stop participation experience.

5.3 Competitive Analysis

KGeN leads Web3 competitors in account registration and MAU. PoH and PoP scores are key competitive advantages.

Future needs:

• Continue to expand in emerging markets
• Maintain eCAC cost advantage
• Prove user value through PoC attributes

6. Future Opportunities

KGeN Future Development Suggestions:

• Use external rewards to incentivize users to complete non-spontaneous tasks
• Avoid providing predictable fixed ROI
• Enhance PoC dimensions and build a unique dataset
• Encourage KGeN Store on-chain transactions
• Improve attribution and AI technology stack, build data barriers

7. Conclusion

KGeN has become the largest player database in the Web3 gaming sector, holding a first-mover advantage in emerging markets. Future needs:

• Maintain continuous growth after token issuance
• Become the preferred UA solution in emerging markets
• Optimize UA model to provide ROAS calculation capability
• Accelerate the development of AI and data tools

KGeN has the potential to reshape the game issuance field, but it needs to continuously innovate to maintain its competitiveness.