How to Calculate Game LTV: Why One Formula Doesn’t Fit All Genres

In the mobile gaming industry, Lifetime Value (LTV) is no longer an unfamiliar concept.
However, many marketers still oversimplify LTV as just “revenue per user,” applying a one-size-fits-all formula across different game genres.

But the real question is:
"If users in this genre typically churn early, should we be projecting a shorter LTV?"

Calculating LTV isn’t just about math — it’s about understanding the distinct behavioral patterns of users in each genre.
This article explores how LTV should be interpreted by genre, and how to align your ad channel selection accordingly.

Why One LTV Formula Doesn’t Apply to Every Game

Each mobile game genre exhibits unique patterns in user behavior, monetization models, and churn timing.

• Hyper-Casual: Fast acquisition, fast churn. Revenue driven primarily by ads.

• Midcore RPG: High entry barrier, long-term engagement. Monetization through in-app purchases.

• Simulation/SLG: Multiple logins per day. Long-term revenue is key.

Because of these differences in playtime, retention curves, and revenue mechanics, marketers need to move away from relying on averages — and instead establish LTV baselines by genre.

How LTV Interpretation Varies by Genre

Hyper-Casual: Short Lifespan, High Volume Play

Hyper-casual games predominantly operate on ad-based monetization, with rewarded and interstitial ads being the main revenue drivers.
These ads are typically triggered either as a reward mechanism or during app transitions to generate value.

Users generally do not stay long in these titles, leading to shorter per-user LTVs. In other words, the long-term value extracted from each user is relatively low.

Thus, the success of hyper-casual games depends less on high individual LTVs and more on scaling installs and maximizing ad impressions. The strategy is to drive large volumes of installs and amplify total impressions to increase total revenue.

Ad Channel Considerations:

• Prioritize channels that extend average session time per install rather than just install volume.

• Use rewarded ad networks that incentivize longer engagement to retain otherwise short-term users.

Puzzle/Casual: Balanced Model Leveraging Both Ads and IAP

Puzzle and casual games often exhibit lower ARPDAU (Average Revenue Per Daily Active User), but they succeed in gradually building long-term LTV through sustained engagement. The monetization model balances in-app purchases and ad revenue, generating stable income over time.

These games compensate for lower daily monetization by maintaining high retention rates and repeat play patterns.

Ad Channel Considerations:

• Opt for ad experiences that drive repeat engagement without disrupting game flow.

• Ensure user acquisition aligns with the rhythm of gameplay to promote seamless long-term retention.

RPG/Midcore: Deep Engagement with High Conversion Potential

RPG and midcore titles follow a distinct pattern of monetization and user behavior compared to casual genres.
These games rely heavily on “whale users” — a small segment of players who contribute disproportionately through large in-app purchases.

These users tend to exhibit high loyalty and deep engagement, spending substantial amounts that significantly impact the game's total revenue.

While initial installs or user acquisition numbers may be lower than in casual games, those who enter these ecosystems often engage deeply with complex systems, stories, and character progression over extended periods.
Community involvement, such as guilds and social interactions, further contributes to reducing churn.

Ad Channel Considerations:

• Channels that preserve immersion yield higher LTV users in this genre.

• Focus on sources that optimize for actual playtime and engagement rather than sheer install numbers.

Behavior Insights Are More Critical Than Formulas

Many marketers overly focus on LTV as a numerical formula.
However, the real insight lies in answering questions like:

• When do users typically churn?

• Do ads help retain users or cause drop-off?

• How frequently do users log in, and at what point do they convert?

Only by addressing these behavioral factors can LTV analysis go beyond surface-level metrics.

The Role of Playtime-Based Ad Channels

Ad channels are not merely a means of driving installs.
The type of users they attract can redefine the entire LTV structure of a game.

Playtime-driven rewarded networks offer significant advantages:

• Rewards are based on actual engagement metrics, not just installs.

• Users who engage with these ads are more likely to stay longer and play more.

• Increased session count and session length → positively impacts LTV.

If your monetization model values in-game time over install count, these channels are far more efficient and cost-effective.

Strategic Summary: How to Calculate Game LTV

Applying a universal LTV formula across all games is ineffective.

Each genre requires a unique approach based on user behavior and monetization dynamics.

If you’re looking to acquire players that genuinely enhance your LTV through extended in-game activity, reach out to us today.

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