Lifetime value
Also said as LTV, LTV/CAC, Payback
The money you expect from a player over all the time they play. If it's more than you pay to acquire one, you can buy growth with advertising.
It drives what you can spend on ads and whether the game can exist at all. It is also a forecast: it has to guess the long tail from short data, and small changes in the guess swing the answer, so an honest LTV comes with a range. It is a poor reason to design anything, because anyone chasing it starts asking how to extract more.
Say it
“At a $2 install cost and $1.60 predicted LTV, we lose money on every install. Pausing ads until day 7 improves, and don't let anyone fix this by raising prices on current players.”
Not to be confused with revenue
Revenue is what came in. Lifetime value is a prediction about what will come in from a player you have only just met.