ARPU/LTV/CAC Calculator - Mobile Game Economics
Calculate the key financial KPIs for your freemium mobile game: ARPU, LTV, CAC, payback period, and LTV/CAC ratio to assess the sustainability of monetization.
How to analyze a mobile game's economy
Nei giochi mobile free-to-play, tre metriche guidano le decisioni di business: ARPU (ricavo medio per utente attivo), LTV (valore dell'intero ciclo di vita del giocatore) e CAC (costo di acquisizione utente). Il rapporto LTV/CAC è il KPI di sostenibilità: se è inferiore a 1 il gioco perde denaro su ogni utente acquisito; se supera 3 l'unit economics è sana e conviene investire in user acquisition.
The ARPU is calculated by dividing the revenue by the DAU (Daily Active Users) for the period. The LTV emerges by multiplying the ARPPU (revenue per paying user) by the conversion rate and average duration in months. The CAC divides the spend on user acquisition by the number of new users acquired. The payback period - CAC/ARPU - indicates how many months it takes to recover the acquisition cost.
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Frequently Asked Questions
What is ARPU in mobile gaming?
The ARPU (Average Revenue Per User) is the average revenue per active user during the period. It is calculated by dividing total revenue by DAU (Daily Active Users). It is the main metric for evaluating your game's profitability: an increasing ARPU indicates improving monetization as users get to know the game.
How is a mobile player's LTV calculated?
LTV (Lifetime Value) estimates the total economic value generated by a user throughout their relationship with the game. The formula used in this tool is: ARPPU × conversion rate × average duration in months. Some publishers use variants that include support costs or churn probability for future periods.
What is a good LTV/CAC ratio for a mobile game?
For free-to-play mobile games, an LTV/CAC of at least 3 is considered healthy: each dollar spent on acquisition generates $3 in lifetime value. Below 1, the game loses money on each acquired user. Top publishers aim for an LTV/CAC between 4 and 6 to have sufficient margin for reinvesting in marketing.
What is the conversion rate in mobile gaming?
The conversion rate (or paying user ratio) is the percentage of active users who make at least one in-app purchase. In Western free-to-play games, it typically ranges from 1% to 5%. In Japan and South Korea, it can reach 10–20% for some genres (puzzle, card RPG). Improving this rate by even 0.5 percentage points can have a huge impact on LTV and profitability.
How to reduce CAC in mobile gaming?
Lower CAC by optimizing UA campaigns (A/B testing creativity, audience targeting, channels), improving the store page (ASO) to boost organic install rate, and leveraging retention to drive word-of-mouth. Generally, it's wise to invest in UA only after validating that LTV/CAC > 1 with organic or low-cost users.
What is the difference between ARPU and ARPPU?
The ARPU (Average Revenue Per User) is the revenue per all active users, including non-spenders. The ARPPU (Average Revenue Per Paying User) measures only paying user value. ARPU = ARPPU × conversion rate. ARPPU helps understand your top spenders and optimize in-app offers; ARPU measures overall monetization efficiency.
How is it used?
- Enter monetization data
Shows the total revenue for the period (week, month, or year) and the number of daily active users (DAU) in the same time frame. These figures determine the ARPU, a key metric for average user profitability.
- Define the paying user profile
Enter the conversion rate (% of DAU who purchase) and ARPPU - monthly revenue per paying user. These two values, multiplied by the average lifetime duration, determine the estimated LTV.
- Add acquisition costs
Enter the total UA spend for the period - typically advertising costs on Meta Ads, Google UAC, Apple Search Ads, Unity Ads, etc. - and the number of new users acquired. The CAC is calculated by dividing the spend by the new users.
- Interpret the results
LTV/CAC ≥ 3 indicates a sustainable monetization model. The payback period in months shows how long it takes to recoup the CAC. If LTV < CAC, the acquisition cycle is losing money - reduce CAC or increase ARPPU or conversion rate.
Mobile Gaming Glossary
- Revenue per user average
- Average revenue per active user in the period. Calculated by dividing total revenue by DAU. Measures overall monetization efficiency regardless of paid and free users mix.
- Average Revenue per Active Payer
- Average revenue per paying user. Segments economic value to only those users who make in-app purchases. ARPU = ARPPU × conversion rate. Optimizing ARPPU means finding the right balance between pricing and perceived value of offers.
- Customer Lifetime Value
- Total economic value generated by a user throughout their relationship with the game. It is the most important KPI for assessing the ROI of user acquisition: if LTV > CAC, the game grows profitably; otherwise, acquiring each user results in a loss.
- Cost of acquiring a new customer
- Average cost to acquire a new active user, calculated by dividing the UA spend by new users acquired. Includes mobile platform ads (Meta, Google, Unity, ironSource), incentives, and campaign operational costs.
- Return on Investment Timeframe
- Months needed to recover CAC through ARPU. A payback period under 6 months is typically considered excellent in mobile gaming; over 12 months requires significant capital to support growth before ROI.
- Active Daily Users
- Unique number of users who open the game at least once a day. It is the fundamental engagement metric: ARPU is calculated based on this. The DAU/MAU ratio measures the game's "stickiness": values above 0.2 indicate good retention.