How to Calculate Game ARPU: A Practical Guide with Real-World Examples

In mobile game monetization, few metrics are as widely referenced—and as often misunderstood—as ARPU, or Average Revenue Per User.

At first glance, it seems simple: divide your revenue by the number of users. But in reality, how you calculate ARPU determines how accurately you understand your game’s performance, how well you optimize campaigns, and how precisely you project revenue growth.

Whether you're evaluating the impact of a new ad placement, validating your CPI strategy, or forecasting ROAS, accurately calculating ARPU is foundational.

In this guide, we’ll go beyond the textbook formula and walk through:
Exactly how to calculate ARPU for different game types, Common mistakes that distort the metric, and how to apply ARPU insightfully to your monetization strategy.

Let’s start with the fundamentals—because an incorrectly calculated ARPU isn’t just inaccurate, it’s expensive.

What Is ARPU and Why Accurate Calculation Matters

ARPU, or Average Revenue Per User, is a key metric used to assess how effectively a mobile game generates revenue per player. It's widely used in financial reporting, campaign performance reviews, and strategic planning. But while the formula looks simple, its accuracy depends entirely on how you define and measure its inputs.

At its core, ARPU answers this question:

“How much revenue does each user generate over a defined period of time?”

This might sound straightforward, but the stakes are high. Miscalculating ARPU can:

• Mislead UA (user acquisition) decisions, especially when comparing ARPU to CPI (Cost Per Install)

• Distort LTV (Lifetime Value) projections, causing budgeting errors.

• Obscure monetization issues, especially if high revenue is concentrated among a small user segment

  

For example, imagine your ARPU is reported as $1.80—but the calculation includes inactive or invalid users, inflating the denominator. Your true monetization efficiency may be much higher, and decisions made based on that flawed number could lead to misaligned UA bidding or under-monetization.

That’s why knowing how to accurately calculate game ARPU is a fundamental skill for any game marketer, monetization manager, or product analyst.

The Formula: How to Calculate Game ARPU

The standard formula for calculating ARPU is:

ARPU = Total Revenue / Total Users

Choose Your Time Frame

You can calculate ARPU for different time periods depending on your needs:

• Daily ARPU (dARPU): Measures monetization per active user per day

• Monthly ARPU (mARPU): Measures monetization over 30 days

• Custom Cohort ARPU: Measures ARPU for a specific user group over a campaign or feature rollout

For example:

• If your game generated $25,000 in revenue over 30 days and had 50,000 unique users during that period:
  → Monthly ARPU = $25,000 / 50,000 = $0.50

Where to Source the Data

• Revenue:

  • In-app purchases (IAP) from app stores

  • Ad revenue from mediation platforms (e.g., Google AdMob, ironSource, Unity Ads)

  • Include all monetization sources for a complete ARPU figure.

• User Count:

  • DAU or MAU, depending on your timeframe

  • Avoid counting users more than once

  • Exclude bot traffic or fraudulent installs.

Tip: Use cohort-based dashboards in tools like Firebase, Adjust, or GameAnalytics to track accurate user counts and time-bound revenue.

Real-World Examples of ARPU Calculation

Understanding the ARPU formula is one thing—putting it into practice is another. Depending on your monetization model, the numbers behind your ARPU can vary significantly. Below are two realistic examples to help you see how ARPU is calculated in different mobile game contexts.

Example 1: Casual Ad-Based Game

Let’s say you operate a casual puzzle game that monetizes primarily through rewarded ads and interstitials, not in-app purchases.

Campaign Data (30-day period)

• Total ad revenue: $40,000

• Total installs: 80,000

• Active users (MAU): 70,000

ARPU = Total Revenue / Total Users
ARPU = $40,000 / 70,000 = $0.57

Key Insight:
In ad-driven games, even if most users don’t spend money, ARPU reflects how often they engage with ads. The focus should be on increasing session time, ad views per user, and eCPM performance to improve ARPU.

Example 2: Midcore IAP-Focused Game

Now let’s consider a strategy RPG with fewer players, but higher monetization through in-app purchases.

Campaign Data (30-day period)

• In-app purchase revenue: $120,000

• Total installs: 20,000

• Paying users: 2,000

• MAU: 18,000

ARPU = Total Revenue / Total Users
ARPU = $120,000 / 18,000 = $6.67

For reference, the ARPPU (Average Revenue Per Paying User) would be:

ARPPU = $120,000 / 2,000 = $60.00

Key Insight:
High ARPU doesn’t always mean broad monetization—it could mean a small group of whales is spending a lot. In such cases, it’s important to monitor ARPPU and retention alongside ARPU to ensure long-term revenue stability.

Side-by-Side Comparison

What These Examples Tell Us

• ARPU varies significantly by genre and monetization type.

• In ad-based games, volume and engagement drive ARPU.

• In IAP-heavy games, a small percentage of users (payers) heavily influence the metric.

• Understanding the story behind your ARPU is just as important as the number itself.

Common Mistakes When Calculating ARPU

While the formula for ARPU is relatively simple, misapplying it is surprisingly common, especially in fast-paced UA and monetization teams where decisions are made at speed. Let’s look at some of the most frequent mistakes and how to avoid them.

Mistake 1: Using the Wrong User Base

“Should I divide by installs, MAU, or DAU?”

Choosing the wrong denominator is the #1 cause of misleading ARPU. If you calculate monthly revenue but divide by DAU, your ARPU will be inflated. Likewise, using total installs instead of active users dilutes the metric, especially when many users churn quickly.

Align your time frame across metrics. For example:

• Monthly ARPU = Monthly revenue / Monthly Active Users (MAU)

• Daily ARPU = Daily revenue / Daily Active Users (DAU)

Mistake 2: Including Non-Human Traffic or Invalid Users

Bots, fraudulent installs, and pre-registration accounts that never convert can distort both revenue and user counts.
Filter your dataset using MMPs (like Adjust or Appsflyer) and in-house fraud detection to exclude:

• Known bot sources

• Fake clicks or installs

• Dormant pre-reg users

Mistake 3: Ignoring Refunds or Chargebacks

Gross revenue may not reflect what you actually earned. If refunds are not deducted, ARPU will look artificially high—especially in games with aggressive IAP strategies.
Use net revenue wherever possible:

• After platform fees

• After refunds and chargebacks

• Consistent with how you're reporting CPI, ROAS, or LTV

Mistake 4: Mixing Revenue Types Without Segmentation

Not all revenue is the same. If you’re blending ad revenue and IAP without understanding which users contributed what, you lose important strategic insight.

• Calculate ARPU by revenue stream (e.g., IAP ARPU vs Ad ARPU)

• Consider segmenting users by behavior (e.g., ad-only users vs hybrid vs payers)

Mistake 5: Calculating on the Wrong Time Window

Some teams pull 7-day revenue and divide it by a 30-day user base—or worse, mix cohort-based revenue with rolling user counts.

• Use matching windows (30-day revenue ÷ 30-day users)

• If using cohorts, keep the cohort consistent in both revenue and user counts.

Summary: Accuracy Is Everything

A miscalculated ARPU isn’t just inaccurate—it’s dangerous. It can lead to:

• Overpaying for UA

• Undervaluing strong-performing channels

• Misjudging monetization potential

As ARPU is often used to guide CPI caps, LTV forecasts, and UA budgeting, even small errors can scale into large financial missteps.

ARPU vs ARPPU vs ARPDAU — Which One to Use?

When analyzing game revenue performance, it's easy to get lost in the alphabet soup of monetization metrics: ARPU, ARPPU, ARPDAU.
Each tells a different story—and knowing when and why to use each is essential for accurate decision-making.

Let’s break them down:

ARPU — Average Revenue Per User

Formula: Total Revenue / Total Active Users (over a time period)

This is the most broadly used metric. It includes all users, regardless of whether they spend or not, and it reflects the overall monetization health of your user base.

• Best used for:

  • Evaluating monetization performance across the whole population

  • Comparing against CPI to assess UA efficiency

  • Reporting to stakeholders or execs

ARPPU — Average Revenue Per Paying User

Formula: Total Revenue / Number of Paying Users

ARPPU zooms in on users who actually spend money. It excludes non-payers, and therefore tends to be much higher than ARPU—sometimes dramatically so.

• Best used for:

  • Measuring the monetization effectiveness of premium features

  • Evaluating whales and spending distribution

  • Understanding potential for upselling or VIP segmentation

Insight: A high ARPPU but low ARPU? It likely means only a small % of users are paying—and you're monetizing heavily from just a few.

ARPDAU — Average Revenue Per Daily Active User

Formula: Daily Revenue / Daily Active Users

This is a real-time performance metric, often used in live ops dashboards. It reflects day-to-day monetization efficiency, making it ideal for tracking the impact of short-term events or A/B tests.

• Best used for:

  • Live event performance tracking

  • Testing monetization features (ads, IAP offers)

  • Operational monitoring in product teams

Which Metric Should You Use?

Each of these metrics answers a different business question. Rather than choosing just one, use them together to form a complete picture of your monetization ecosystem.

Applying ARPU in Monetization Strategy

Now that you know how to calculate ARPU—and avoid common pitfalls—the next question is:
“So what?”

In other words: How do you actually use ARPU to improve your game’s monetization performance?

Below are practical ways ARPU can guide smarter decision-making across UA, product, and monetization teams.

Use ARPU to Evaluate UA Performance

ARPU is one of the most important benchmarks to compare against CPI (Cost Per Install).

If ARPU > CPI, your campaign is profitable (before overhead).
If ARPU < CPI, you're acquiring users at a loss.

By calculating ARPU on a cohort basis, you can:

• Identify which campaigns bring in higher-value users.

• Adjust your bidding strategy to focus on ROAS-positive channels.

• Optimize creative and targeting for monetization potential

Pro tip: Don’t just look at average ARPU—compare ARPU by channel, country, and creative set.

Segment ARPU by User Behavior

Not all users monetize the same way. Segmenting ARPU can reveal opportunities to tailor monetization strategies:

Tracking ARPU per segment helps you understand value per persona and align features, pricing, and UA with their behavior.

Predict LTV with ARPU × Retention

ARPU is also the foundation for LTV estimation, especially in early-stage campaigns.
When multiplied by user retention over time, ARPU becomes a powerful forecasting tool:

LTV ≈ ARPU × Average User Lifespan (days or weeks)

For example:

• Day 7 ARPU = $0.90

• Retention curve suggests users stay active for ~30 days
  → Estimated LTV = $0.90 × (30/7) ≈ $3.86

This helps product managers and UA leads:

• Set realistic CPI goals.

• Forecast break-even points

• Project campaign-level revenue

Optimize In-Game Systems Based on ARPU Trends

Monitor ARPU over time to:

• Spot monetization drops after game updates or UX changes

• Validate the impact of new features or ad placements.

• Identify churn spikes linked to monetization friction

By combining ARPU with engagement metrics like session time and retention, you can proactively fine-tune your monetization design.

In Summary

ARPU isn’t just a number—it’s a strategic lens.

It tells you whether your game is converting users into revenue efficiently, whether your UA spend makes sense, and where to focus your product improvements.

When used correctly, ARPU becomes a core KPI that connects marketing, monetization, and product strategy into one cohesive roadmap.

Conclusion — ARPU Is Only as Good as Its Accuracy

ARPU may look like a simple equation, but behind that average lies a deep well of insight—or a misleading illusion, if calculated poorly.

When used correctly, ARPU helps game teams:

• Evaluate user acquisition performance in monetary terms.

• Forecast revenue growth with confidence.

• Understand user value across segments.

• Optimize monetization systems in real-time.

But none of that works if your inputs are wrong.

Accurate ARPU isn’t optional—it’s essential.

Whether you’re a UA manager setting CPI targets, a monetization lead running ad tests, or a product manager optimizing engagement flows, ARPU can be your strategic compass—if you treat it with rigor.

So next time you pull your ARPU numbers, don’t just copy-paste from a dashboard. Ask:

• Are you using the right user base?

• Are you segmenting intelligently?

• Are you pairing ARPU with retention and LTV?

Because in-game monetization, you don’t just measure ARPU—you build around it.

Want more insights like this? Download our latest Global Game Advertising Trends Report.

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