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Understanding the revenue potential players bring throughout their gaming journey isn't just an advantage—it's the key to gaining a competitive edge for game companies. From optimising user acquisition strategies to refining financial planning, the significance of Lifetime Value (LTV) prediction cannot be overstated.

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Charting the different customer relationship types based on “Opportunities of Transactions” vs “Type of Relationship with Customer”, you will find that freemium games could be labeled as non-contractual and continuous, as the purchases can happen at any time and the amounts vary. Some games may however also include elements that could be classified as discrete and contractual, but usually the emphasis is on the former category.

Here are 10 reasons why predicting Lifetime Value (LTV) is an absolute game-changer for mobile games:

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Monetisation Strategy

LTV prediction helps game developers and publishers design effective monetisation strategies. By estimating the potential revenue generated by a player over their entire gaming journey, developers can implement appropriate in-app purchases, advertising, or subscription models. Not showing ads to high spenders can improve their engagement and spending, whereas more ads can be shown to zero spenders to monetise better 

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User Acquisition Optimisation

Knowing the expected LTV of players allows for more informed decisions regarding user acquisition costs. Invest on campaigns with highest return on investment. Developers can adjust their marketing budgets and strategies to acquire users whose predicted lifetime value exceeds the cost of acquisition, ensuring a positive return on investment.

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Customer Service

The companies can prioritise high spending customers to keep them happier and more engaged 

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Resource Allocation

LTV prediction assists in allocating development resources more efficiently. Games can prioritise updates, features, and content that resonate with high-LTV players, enhancing user retention and satisfaction.

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Adaptive Game Design

Understanding the predicted LTV of players helps in designing games that encourage longer play sessions and engagement. This can involve creating compelling content, implementing retention features, and optimising the overall gaming experience to increase the likelihood of players making in-app purchases.

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Retention Strategies

Games can implement targeted retention strategies based on LTV predictions. By identifying segments of players with higher lifetime values, developers can tailor engagement campaigns, offers, or rewards to keep these players actively involved over an extended period.

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Scaling Opportunities

LTV prediction supports strategic decisions related to scaling the game. Developers can focus on marketing and expanding games with higher predicted lifetime values, potentially leading to increased profitability and a larger player base.

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Community Building

High-LTV players often contribute positively to the game community. Recognising and engaging with these players can lead to a more vibrant and supportive player community, which in turn can attract and retain more players.

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Investor and Stakeholder Confidence

For mobile game companies seeking investment or partnerships, accurate LTV predictions provide confidence to investors and stakeholders. Demonstrating a clear understanding of how player value evolves over time enhances credibility and trust.

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In summary, LTV prediction is a critical tool for mobile game developers and publishers to optimise various aspects of their business, from monetisation and user acquisition to resource allocation and community building. It plays a central role in making data-driven decisions that contribute to the long-term success and sustainability of mobile games in a highly competitive market.

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Try out Cost Center's Prediction feature

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