Lets Talk Numbers
Simple Equation : Make more money per user than you spend in
acquisition and retention
Y= Lifecycle value of user
X= Money Spent on Acquisition and Retention
Y>X Your Spread is positive and you can
start scaling your game
Go Freemium or Go Home
If the game is not offered as freemium than it will be very tough
to drive downloads and play sessions
Three Ways to monetize freemium:
1. Advertising Revenue
2. Direct In-App Purchases (IAPs)
3. Driving more downloads
Economics of IAPs
80% of IAPs come from 5%-10% of total user base who have
played 50 or more sessions
With this data in mind, you can start to form your game design to include a
funnel that draws people through the flow of acquisition, engagement and
retention to have the greatest monetization outcome possible.
1. User Acquisition Data
In the beginning, a player’s lifetime value is either zero or not zero. Basically,
either they download & play or they don’t.
The most important KPI data points to analyze at this stage are:
● New downloads
● New users completing at least one game
● Average number of games completed by new users within the first day after
the initial download
● Drop off rates
If the drop off rates are too high, or the users aren’t playing as many games as you’d
like, troubleshoot or modify one or all of these 3 factors:
● Incentivized downloads
● Finding out if the game is being downloaded by a non-targeted demographic
● A complex, elaborate sign-up process
● Lackluster or absent tutorial to guide users through their first interaction with the
2. Engagement: Key To App Monetization
Once the user has spent some time with the game, you want to entice him to make it
a part of his everyday routine: something he gets into the habit of returning back to.
Normally, this means he plays the game 3 to 10 times per day.
At this point, important KPI data to track include:
● Number of gaming sessions per day
● Frequency with which a player returns to the game & time lapse between
Here, data-ridden activity maps help you know how a player is doing in different
sessions and what content to include in your notifications.
3. In-App Retention Analytics
After the user finishes 10 to 50 gameplay sessions, you need to pay a lot of attention
to the depth of the game to keep them hooked with a personal interest in succeeding.
Here, the most important thing for game designers to keep an eye on is
milestone or mission-based metrics to find out where users are getting stuck or
frustrated. Heat maps are especially helpful in figuring out where to fine-tune the
game’s design-related parameters on different levels.
To find out which levels you need to start
fine-tuning the most, track retention
rates in percentages at each of the
following time-point milestones:
4. App Monetization Strategies
Here, to ensure your strategies for requesting IAPs are working to their maximum
efficiency, track these KPIs:
● ARPDAU (average revenue per daily active user)
● ARPPU (average revenue per paying user)
● LTU (lifetime value of user)
● Inflation (whether or not the user has too many extra lives already at the time of
an IAP request)
Once someone has become a dedicated player, it’s time to convert him into a
spender by pushing him through the monetization funnel.