Introduction:
Mobile gaming has become a billion-dollar industry, with millions of players worldwide spending billions of dollars each year. However, to succeed in this competitive marketplace, mobile developers need to understand the concept of lifetime value (LTV) and how it affects their bottom line. LTV refers to the total amount of money a customer is expected to spend on a game over their entire lifetime as a player. In this article, we will explore the different methods for computing LTV, provide examples of successful mobile games that have maximized their LTV, and offer actionable advice for developers looking to increase their own LTV.
Method 1: Cohort Analysis
Cohort analysis is one of the most common and straightforward methods for calculating LTV. This method involves grouping players based on shared characteristics, such as when they first downloaded the game, how often they play, or how much they spend. Once these groups are created, developers can calculate the average LTV for each cohort by dividing the total revenue generated by that cohort by the number of players in that cohort.
Method 2: Churn Prediction
Churn prediction is another method for calculating LTV that involves predicting which players are most likely to stop playing the game and how much they are likely to spend before they churn. This method requires developers to analyze player behavior, such as how often they play, how long they spend in the game, and what features or content they engage with.
Method 3: Customer Lifetime Value (CLV) Modeling
Customer lifetime value (CLV) modeling is a more advanced method for calculating LTV that involves using statistical models to predict the total amount of money a customer will spend over their entire lifetime as a customer. This method requires developers to collect data on player behavior, such as how often they play, how much they spend, and what features or content they engage with.
Successful Mobile Games:
Many mobile games have successfully maximized their LTV by using a combination of the methods outlined above. Here are a few examples:
- Clash of Clans: Clash of Clans is a popular mobile strategy game that has been around since 2012. The game has generated billions of dollars in revenue and has a highly engaged player base. Clash of Clans uses a combination of cohort analysis and churn prediction to maximize its LTV.
- Candy Crush Saga: Candy Crush Saga is another popular mobile game that has been around since 2012. The game has generated billions of dollars in revenue and has a highly engaged player base. Candy Crush Saga uses a combination of cohort analysis and customer lifetime value (CLV) modeling to maximize its LTV.
- Pokémon GO: Pokémon GO is a mobile augmented reality game that was released in 2016. The game has generated billions of dollars in revenue and has a highly engaged player base. Pokémon GO uses a combination of cohort analysis and churn prediction to maximize its LTV.
Actionable Advice for Developers:
To maximize their own LTV, mobile developers can follow these actionable tips:
- Offer in-app purchases: In-app purchases are a great way to generate additional revenue from existing players. However, it’s important to offer value for the money and not overly burden players with too many purchase options.
- Create engaging content: Engaging content is key to keeping players coming back. Developers should focus on creating content that is both fun and challenging, and that offers players a sense of accomplishment when they complete it.
- Personalize the player experience: Personalizing the player experience can help keep players engaged and increase their LTV. Developers should collect data on player behavior and use this data to create personalized experiences that are tailored to each player’s needs and interests.