Introduction
Mobile games are becoming increasingly popular as people spend more time on their phones. However, creating and maintaining a mobile game can be expensive, and it’s important to ensure that your investment will pay off in the long run. One way to do this is by computing the lifetime value (LTV) of your mobile game.
Understanding LTV
Lifetime value is a key metric for mobile game developers because it helps them understand the potential return on investment for their games. It’s calculated by taking into account the average revenue per user (ARPU) and the average churn rate of your players. ARPU refers to the amount of money each player spends on your game over time, while churn rate refers to the percentage of players who stop playing your game after a certain period of time.
To calculate LTV, you need to know both the ARPU and churn rate of your players. You can find this information by analyzing your game’s financial data or by conducting surveys to gather player feedback. Once you have this information, you can use the following formula to calculate LTV:
LTV (ARPU x average playtime in months) – acquisition cost
Acquisition cost refers to the amount of money it costs to acquire a new player. This includes marketing and advertising expenses, as well as any other costs associated with acquiring a new player.
Case Study: Candy Crush Saga
Candy Crush Saga is one of the most popular mobile games in the world, with over 500 million downloads and $1 billion in revenue generated from in-app purchases alone. The game’s developers, King, were able to maximize their LTV by implementing a number of strategies that encouraged players to spend money on the game.
Tips for Maximizing LTV
There are a number of strategies that mobile developers can use to maximize their LTV. Here are some tips:
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Focus on retention: As mentioned earlier, it’s important to focus on retaining your players rather than acquiring new ones. This means creating a game that is engaging and fun, and providing regular updates and content to keep players coming back.
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Offer in-app purchases: In-app purchases are a great way to generate revenue from your players. However, it’s important to offer them strategically and at the right time. For example, you might want to offer in-app purchases after a player has been playing for a certain amount of time, or after they have completed a particular level or achievement.
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Use data analytics: Data analytics can provide valuable insights into your players’ behavior and preferences. By analyzing this data, you can create more targeted and personalized content that is likely to resonate with your players and encourage them to spend more money on the game.
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Create a sense of community: A sense of community can help to create a loyal following of players who are more likely to spend money on the game. You can create this sense of community by offering social features, hosting events, and encouraging players to share their progress on social media.
Conclusion
Lifetime value is an important metric for mobile game developers because it helps them understand the potential return on investment for their games.