What is LTV?
Lifetime value (LTV) predicts the total revenue a single user will generate over their entire time in an app.
LTV is most simply calculated as average revenue per user (ARPU) multiplied by average user lifetime. It’s built from two inputs: in-app purchases and in-app advertising (based on how many ad impressions a user sees over their lifetime).
A high-LTV user is typically also a high-retention user; someone who stays in the app long enough to generate meaningful revenue through either channel.
How is LTV calculated?
The most common formula for LTV is:
LTV = ARPU × Average user lifetime
See the worked example below:
ARPU: $0.15/user/day
Average user lifetime: 90 days
Calculation: $0.15 × 90 = $13.50
In this example, the LTV equals $13.50.
Why does LTV matter?
LTV gives user acquisition teams a ceiling for how much to spend acquiring a user. Paying less than a user’s predicted LTV to acquire them (cost per install) keeps a campaign profitable, while paying more erodes margin even if install volume looks healthy. Unity’s own Vector AI uses predicted player-value signals like this to match players with games and bid into auctions on advertisers’ behalf, which is a direct, mechanism-level use of LTV-style prediction rather than a general AI feature.
What are the benefits of using LTV?
- Forecast revenue: Project a game’s future revenue from current user behavior rather than only looking backward.
- Set a defensible UA budget: Know the maximum you can pay to acquire a user while staying profitable.
- Sharpen monetization strategy: Compare in-app purchase and ad-based revenue strategies on the same scale.
- Build investor confidence: Show a data-driven view of long-term user value, not just short-term downloads.
What are the challenges of using LTV?
- Genre variability: A good LTV for a hyper-casual game can look like a poor one for a mid-core game, so benchmarks rarely transfer across genres.
- Forecasting takes time and data: Accurate LTV modeling needs enough historical cohort data to project future behavior, which newly launched games don’t yet have.
- Easy to over-attribute to UA: LTV can shift for reasons that have nothing to do with acquisition, such as onboarding or retention changes, so treating it as a pure UA metric can point fixes at the wrong team.
What are the strategies to increase LTV?
There are several concrete levers for raising LTV, from ad format choices to retention tactics. For a deeper walkthrough, see Unity's guide to maximizing LTV or, for hyper-casual games specifically, 8 ad placements to boost your hyper-casual game's LTV.
- Integrate rewarded video: Add rewarded video ads into the core gameplay loop to lift both ad revenue and retention at once.
- Strengthen onboarding: A smooth first session keeps more users past the point where most churn happens, before they ever generate revenue.
- Re-engage lapsed players: Use push notifications and deep links to bring inactive users back rather than treating them as a permanent loss.
- Diversify monetization: Pair in-app purchases with rewarded ads so non-paying users still contribute to LTV.
- Reconsider acquisition channels, not just in-game tactics: LTV isn't only shaped by what happens after install; where and how you first reach a user matters too. On-device advertising, for example, tends to produce longer LTV curves than traditional channels.
Frequently asked questions (FAQ)
What is a good LTV for a mobile game?
There is no single good LTV, since it depends heavily on genre and monetization model. Hyper-casual games can be profitable with an LTV under a dollar, while mid-core and core games can reach LTVs in the tens or hundreds of dollars. A more useful benchmark is whether LTV comfortably exceeds the cost to acquire the user.
What is the difference between LTV and ARPU?
ARPU (average revenue per user) is a snapshot: the average revenue a user generates in one period, such as a day or month. LTV is cumulative: the total revenue a user is expected to generate across their entire time in the app. ARPU is one of the two inputs used to calculate LTV.