Lifetime Value

As trends in mobile gaming move towards extended LTV games where players stick around for longer, it’s important to understand their behaviour over time. In this post we're going to explore the issue of convexity in LTV curves, and how to correctly factor this into your wider UA and growth planning models.

A gaming company needs data and analytics to understand player behavior, predict LTV, and innovate live ops. Understanding this will allow them to improve player experience and grow their community.

While oftentimes a healthy projected future LTV is a good sign that you have a sustainable, profitable UA strategy, what can sometimes get lost in the optimism of strong projections is that LTV is a made up number - and the map can sometimes differ from the territory.

As app marketing gets more sophisticated, there’s an increasing focus on metrics of every sort. Having a clear understanding of your unit economics is extremely important specifically customer acquisition cost (CAC) and user lifetime value (LTV) - how much a customer costs to acquire and the expected value of that customer over time from your app or game.

When most developers are looking at acquisition costs on mobile, many get stuck in short-term thinking, getting hung up on headline prices rather than a return on investment calculation.

Since creating the first app store lending product in 2014, we’ve learned a lot about how developers can use their receivables as a really effective and capital-efficient way to grow their business. We’ve rolled all of this learning into our new credit line product, making it easier than ever for qualifying developers to access a new source of low-cost capital to grow their business.

Lifetime Value is prized as a predictive metric, one that yields the value of future cash flows based on calculations tied to the actions and affinities of your users. But users are different and provide a different level of value depending on the category of app you offer and the user journey it enables.

Lifetime Value is all revenue a single user is expected to generate from the time they download the app until they stop using it. It’s quantified as a window of time in which an app is seen as turning a profit over operating costs.

App developers by their very nature are inherently clever people. Crafting a mobile app or game requires plenty of experience and smarts. Unfortunately, however, developers are so focused on their product, and coding a great app, that they are left perplexed by the more traditionally “soft” skills required in marketing and user acquisition to make their app a commercial success.