App & Game Metrics for Captivating Potential Investors
Read about the investment metrics a mobile game studio needs to successfully pass their first investor interview
Mobile game studios often have difficulty finding investments for many reasons related to the business model, as well as the current investment climate. For some years, quality capital partners have been more wary of recession fears and spending more time analyzing and thinking before investing in a new project. However, there is a bit of optimism here and there now, and they are continuing to invest in certain types of businesses such as games.
In this article, we at devtodev are going to help startup founders prepare for meeting with an investor. We’ll tell you exactly what metrics they pay attention to at the first place and why these metrics are so important.
In fact, there are dozens of monetary and retention metrics, but you don’t need to prepare information on 20+ metrics, as this will take the investor into a sea of meaningless data. About a dozen or fewer key metrics will do the trick.
devtodev will simplify the exchange of information with investors. You can send a link to a report or create a dashboard, convert it to a PDF file, and send it.
Monetary Metrics
1. User acquisition cost payback
This is the period of time required for the return on investment in acquiring a new user. Buying a lot of paid traffic is the industry standard because in today’s busy market, you simply can’t rely on organic users alone.
This metric helps investors gauge the effectiveness of acquisition campaigns run by the company.
2. Monthly revenue
Monthly revenue is essentially the total sales revenue for the month. This is a metric that demonstrates the customer’s love for the product and their willingness to pay.
This metric gives investors the overall picture of a company’s financial health.
3. Monthly recurring revenue (MRR)
This is a metric of regular demand on the items you sell in the game in a given month, or on thesubscriptions if the game uses this monetization model. If players renew their subscriptions over and over, or if they buy items and don’t churn, that’s a great sign of its viability. Also, if possible, you can provide information about the Annual recurring revenue (ARR).
This metric gives investors an overall picture of the game’s stickiness, appeal of the items and demand on them.
4. Recurring purchases
If the game has a large number of recurring purchases, this is a very good sign for the investor. This means that the game is fun, well balanced and well structured. This promotes items when and where they are needed if it is a free-to-play game. Or they willingly renew their subscriptions if you use a subscription model.
This metric gives investors an overall picture of the game’s stickiness, appeal of the items and demand on them.
5. Gross margin
It is gross profit in a given month divided by total revenue in the same month and calculated as a percentage. This shows the amount of money left in the pockets of the game developer after paying for all direct costs.
This metric helps investors gauge the amount of money they can pull out from the company.
6. Number of people paid over a month and over time
This number gives the investor an overview of the game’s user base. Is the paying audience of the project large enough? Is it growing or shrinking?This is vital information if the game has been on the market for a while. The investor may doubt that the players have already lost interest in it and moved on to the next game.
This metric gives investors a picture of the game’s paying user base.
7. Historical LTV
Historical LTV (as opposed to predictive LTV) is the sum of revenue divided by the number of customers. Simply put, this is the average amount of income per user. When the investor is presented with the graphs, they can see the historical trend of LTV over the specified time period. In addition, they can see the months with the highest and lowest LTV, as well as sudden ups and downs and analyze them.
This metric is good for analyzing the time necessary for breaking the initial investment and the time necessary to double/triple it.
