Predicting Customer Lifetime Value in Free-to-Play Games

Customer lifetime value (CLV or LTV) refers broadly to the revenue that a company can attribute to one or more customer over the length of their relationship with the company [55]. The process of predicting the lifetime value consists in producing one or more monetary values that correspond to the sum of all the different types of revenues that a specific customer, or a specific cohort, will generate in the future. The purposes of this prediction are manifold: for example, having an early estimation of a customer's potential value allows more accurate budgeting for future investment; moreover, monitoring the remaining potential revenue from an established customer could permit preemptive actions in case of decreased engagement. Predicting customer lifetime value is a complex challenge and, to date, there is no single established practice. Furthermore, due to its wide potential impact in different business aspects, the problem is being researched in different communities using a plethora of different techniques, varying from parametric statistical models to deep learning [28, 70].