How to use this calculator
- Enter average monthly revenue per player.
- Enter the share of revenue retained as gross margin.
- Enter monthly churn as a percentage above zero.
- Optionally add acquisition cost to calculate value after acquisition.
#2872 · Sports & Gaming Tool
Game Development Player Lifetime Value Calculator
Estimate a simplified player lifetime value for game development using monthly revenue per paying player, gross margin, and monthly churn. The calculator also shows implied lifetime, value after acquisition cost, and the maximum acquisition cost at break-even. This steady-state model is best for quick planning and scenario comparison; use cohort-level revenue and retention curves when player behavior changes substantially over time.
Calculator
Revenue and retention assumptionsFormula
Player LTV = Monthly revenue × Gross margin ÷ Monthly churn rate
Implied lifetime is 1 ÷ monthly churn rate. Percentages are converted to decimals before calculation.
What the result means
Estimated LTV is the gross-margin revenue expected from an average player under constant monthly revenue and churn assumptions.
This model assumes stable churn and revenue. It does not replace cohort analysis, discounted cash flow, or a full contribution-margin model.
Example calculation
At $18 monthly revenue, 70% gross margin, and 8% monthly churn, implied lifetime is 12.5 months. Estimated LTV is $18 × 0.70 ÷ 0.08 = $157.50. After a $35 acquisition cost, estimated value is $122.50.
Tips for better results
- Use net revenue when platform fees are material.
- Measure churn and revenue over the same monthly interval.
- Compare cohorts separately when payer behavior differs.
- Run conservative and optimistic churn scenarios.
- Do not interpret break-even acquisition cost as a recommended bid.
Frequently asked questions
Does this calculator use gross revenue or net revenue?
It uses the monthly revenue value you enter. For contribution-style LTV, enter revenue after platform fees and other variable costs.
Why is monthly churn used in the formula?
Under a constant-churn model, the reciprocal of monthly churn approximates the expected customer lifetime in months.
What happens when monthly churn is zero?
A finite lifetime cannot be estimated from the simple churn model, so the calculator asks for a rate above zero.
Can I include acquisition cost in player LTV?
Yes. Enter acquisition cost to see the estimated value remaining after acquisition.
Is this suitable for cohort forecasting?
It is a compact steady-state estimate. Cohort curves are better when retention or revenue changes materially by player age.
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LTV model variables
| Variable | Meaning |
|---|---|
| Monthly revenue | Average revenue per player per month |
| Gross margin | Revenue retained after variable delivery costs |
| Monthly churn | Share of players lost each month |
| Acquisition cost | Cost to acquire one player |