Presentation on Understanding LTV, the most important KPI in gaming

1. Understanding LTV,
the most important
KPI in gaming

2. Agenda
Why
How do we determine
LTV
How do you improve
LTV

3. Why?

4. Why care
about LTV
 Survival
 If LTV is less than CPI, you
are gone
 New products
 LTV potential
 Continued investment
 Ongoing operations and live
services
 Where to focus

5. Why listen to me
•Merscom
•Playdom
•Disney
•Zynga
•Stars Group/PokerStars
Big and small company experience
•Merscom to Playdom
•Playdom to Disney
•Spooky Cool to Zynga
Senior leadership on 3 exits worth over $850
million
•Understanding the Predictable
Wrote the book on LTV

6. How do we
determine
LTV

7. What is LTV
Present value of your customer
Function of
Retention/Engagement
Monetization
Virality

8. What drives LTV
Retention
Monetization
Virality

9. LTV is a
prediction
Not a point
Uncertainty principle
• Perfect predictions are
impossible as the universe is
uncertain (Stephen Hawking)
• Range of likely outcomes
Chaos theory
• One small change can produce
a huge divergence in outcomes

10. Retention, the core to success
CURR/NURR/RURR
D1, D3, D7, D30, D90
Visits day/month
Churn rate

11. Best Retention KPIs EVER
•How well you retain current users
week on week
•All users who played the game
between t-14 and t-20 and who
played the game between t-7 and t-
13, what percentage returned to
play the game between t-0 and t-6
CURR
•How well you retain new users week
over week
•All users who used the product for
the first time between t-7 and t-13,
what percentage returned between
t-0 and t-6NURR
•How well you retain users week on
week who return to the game after a
break of 7 or more days
•All users who used the game some
time in the past, did not use the
product between t-7 and t-13, what
percentage returned to use the
game between t-0 and t-6
RURR
T = today, so t-7 is 7 days before today

12. Monetization = Money
ARPU ARPDAU Clumpiness
Percentage
of paying
users
Time to first
purchase
Time
between
purchases
Frequency
of purchases
Average
transaction
size

13.  Number of new users an existing user
recruits (K-factor)
 K= number of invites sent per player *
conversion percentage
Virality,
the
neglected
weapon

14. How do I calculate it
Different for every
game
f(retention, virality,
monetization)

15. How do you
improve
LTV

16. Where to focus
RETENTION
Virality is great
• If you can get it
Monetization is
actually quite easy

17.  CONTENT
 Get in your players’ head
 Product features
 FTUE
 Progression
 Collection
 Social features
 Marketing
 CRM
 Events
 Support
Keeping
your
players
engaged

18. Core FunctionsForLive Services
Challenges
Setting up daily
and weekly
challenges to
direct gameplay
Subscriptions
Managing the pricing and options
available for the subscription
Economy Optimization
Ensuring players get value from purchases and
keeping supply of virtual currency and goods in
equilibrium
Purchase package
optimization
Creating the right
mix of IAP
packages
Sales andPromotions
Special and limited time offers
that drive, rather than
cannibalizes, monetization
Events
Hourly, daily or weekly
events in-game that increase
engagement

19. ImprovingVirality
Understand the components Encourage Sending Invites Make conversion appealing
Invites sent
Conversion percentage
Reduce friction
Provide prestige/social
currency
Create Triggers
Generate emotions
Focus on stories
Provide special value
An offer they can’t refuse

20. Making more money
 CONTENT
 Balancing
 Events
 Contests
 Quests
 Challenges
 Impact on gameplay
 More or better virtual goods
 Limited edition items
 The shopping experience
 Avoid choice overload
 Anchoring
 Decoy effect
 Calls to buy
 Promotions and sales

21. Thank
You
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