Customer lifetime value assessment and its managerial application in video games

Student: Kungurczev Roman

Supervisor: Dmitriy Potapov

Educational Programme: Master

Year of Graduation: 2014

<p>This paper studies the evaluation and usage of customer lifetime value (CLV) in video games on the example of the online browser-based game “Tanki Online”. As game developers have very low limits for entering new markets and becoming global businesses, the biggest restriction of improving the brand recognition on different markets is limited budget. Hence, the question of evaluating returns of investments becomes crucial. We analyzed the profitability of players considering the stage of their lifecycles. For this purpose, we built multiple regression model and calculated average customer lifetime value and the parameters that the company may use to increase the payback. The value, assessed on the data of Russian and CIS players, was used to define the maximum level of user acquisition costs and understand if the costs that “Tanki Online” currently pays for its purpose are adequate. </p>

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