Gaming Startup Due Diligence: Metrics That Matter
Gaming is a $200+ billion industry — larger than movies and music combined. But investing in games requires a fundamentally different framework than SaaS: hits-driven economics, creative risk, and player behavior dynamics.
Gaming Sub-Sectors
- Mobile Gaming — Free-to-play with in-app purchases, largest market by revenue
- PC/Console — Premium and live-service titles
- Gaming Infrastructure — Engines, backends, analytics, monetization tools
- UGC Platforms — Roblox-style platforms where users create content
- Esports & Streaming — Competitive gaming and content creation ecosystems
What PV1 Evaluates
- Day 1/7/30 Retention: The most critical metrics in gaming — D1 >40%, D7 >20%, D30 >10% for mobile
- LTV/CPI Ratio: Lifetime value must exceed cost per install by >1.5x
- ARPDAU: Average revenue per daily active user — $0.10-0.50 for mobile F2P
- LiveOps Capability: Can the team continuously update and optimize the live game?
Key Metrics
- Retention Curves: Must flatten, not decline to zero
- Paying User Conversion: 2-5% is standard for F2P, >5% is strong
- Session Length & Frequency: Engaged players play 3+ sessions/day
- Organic vs. Paid Install Mix: >50% organic signals strong word-of-mouth
Risk Factors
- Hit-Driven Economics: Most games fail — portfolio approach required
- Creative Risk: Success depends on taste, trends, and timing
- Platform Dependency: App Store/Google Play take 30% and control distribution
- Regulatory Risk: Loot box and monetization regulation tightening globally
Make Smarter Investment Decisions
Stop relying on gut feel. Predict Ventures benchmarks every startup against 15,000+ data points and 50 years of exit history to give you a quantitative edge.
Run your first free report →
Related Reading
.svg.svg)