Lifetime value

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The wrong first question

Lifetime value (LTV) is all the money one player brings in, from install until they stop playing. Course 1 used it to check that a player is worth more than they cost to get.

Kai asks Theo, the studio's data analyst: "Our LTV is $0.60. How do we make it $1?" Theo starts somewhere else: what makes players enjoy Shard Garden enough to keep coming back? LTV follows from that.

LTV by cohort and by day

Google AdMob defines LTV as the total cumulative revenue per user since they installed, counting the install day as D0. It includes ads and in-app purchases, after the stores' share.

For a cohort, AdMob's formula:

Dx LTV = total revenue from D0 to day x ÷ number of players who installed on D0.

So D30 LTV is what the average player of that cohort brought in during their first 30 days.

Do the math

2,000 players installed Shard Garden on 1 September. By day 30 they had brought in $1,200 in total. What D30 LTV should Theo report?

  1. $0.60
  2. $1.67
  3. $40
Show the answer

$0.60

$1,200 ÷ 2,000 players = $0.60. The formula divides by everyone who installed on day 0, including players who left or never spent anything.

The average hides the spread

Google Analytics can show LTV as a total, an average, or the 10th, 50th, 80th and 90th percentiles.

In Shard Garden's data, 97 of every 100 players never buy anything, and their LTV comes from rewarded ads. A few buy a lot. The average D30 LTV is $0.60. The median, the 50th percentile, is $0.05.

An average can rise because three players spent more, while everyone else is less happy.

Quick check

If the average LTV goes up, most players must be spending more.

Show the answer

False

A handful of big spenders can move the average while most players spend nothing. Percentiles like the median show what a typical player does.

Days played is the honest lever

A simple way to see LTV: money per day played × days played.

Money per day can be pushed up with more ads and more pressure to buy, and players notice. Days played go up only when the game is worth coming back to: better co-op, fairer first gardens, good levels from the editor.

A player who enjoys 60 days instead of 20 is worth three times as much, without paying more per day.

Quick check

Which change raises LTV by raising days played?

  1. Fairer first gardens, so new players come back
  2. A countdown that pressures players to buy
  3. Twice as many ads per day
Show the answer

Fairer first gardens, so new players come back

Ads and pressure push money per day, and players notice. Days played rise only when the game is worth coming back to.

What a studio must not do

A 2022 report by the US Federal Trade Commission (FTC) describes dark patterns: design practices that trick or manipulate people into buying things or giving up their privacy. It found them in children's apps, among others. Common tactics include disguised ads, making it hard to cancel, burying key terms and fees, and tricking people into sharing data.

Shard Garden's rules: no fake countdowns, no purchase buttons where a play button used to be, and no purchases without a parent.

True story: Diablo III closes its auction house

Diablo III had auction houses where players traded the gear they found, for gold or for real money. Many players around the world used them.

On 17 September 2013, Blizzard's John Hight announced they would close. He wrote that the auction house "ultimately undermines Diablo's core game play: kill monsters to get cool loot."

The auction houses shut on 18 March 2014, alongside a new loot system that Blizzard said would make "a much more rewarding game experience".

Source: Blizzard: Diablo III Auction House Update (17 September 2013), news.blizzard.com

Design review

Kai, #shop
Let's sell the rarest seeds in the shop. Players could skip weeks of growing, and our money per day would jump.

What does the Diablo III story warn about this idea?

  1. If buying skips the fun part, players may stop coming back, and days played fall
  2. Nothing: money per day is all that LTV measures
  3. Shops never work in games
Show the answer

If buying skips the fun part, players may stop coming back, and days played fall

Blizzard closed auction houses many players used, because buying gear undermined "kill monsters to get cool loot". LTV is money per day times days played: a shop that empties the fun can cut the days.

Numbers everyone reads

LTV, retention, funnels and test results all end up in front of the whole team every Monday. How they are shown decides what the team believes.

Bolt says: Next: which ad brought each player?

Fact-checked 12 October 2026