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Is a new player worth what the game pays to win them?
The prompt
Lanternfox (a fictional studio in Singapore) runs a free-to-play mobile game. It pays USD 2.50 in advertising for each new install. 4 percent of new players ever pay, and a paying player spends USD 60 over their life in the game. The app store keeps 30 percent of in-game purchases. Ads shown to players who never pay bring USD 0.40 per install, and servers and live operations cost USD 0.20 per install. Should Lanternfox spend more on advertising, and what would change the answer?
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