The numbers don't add up. I've been running multiple ad campaigns on Facebook, Google and App Store Ads and I cannot figure out how casual mobile games make money. At the same time, I want to know if it's the weakness of the game, the campaign set up or this is just how business is done in this field right now.

With the average cost of an install ranging from $0.90 to $2.00 I've gotten around 3500 downloads and 1500 in organic downloads totaling 5000.

The current LTV (lifetime value) is $0.20 per user.

20% of those who download the game, stick around after the first week. Out of the 5000, I've received 96 purchases and once you add the in-game reward ads, it totals $920.

What I don't understand is how do you make money if it costs 2x, 3x the LTV to get a customer. Is there a threshold you hit and the numbers reverse? Do you start to get more organic downloads because of the campaigns? Do you just have to stick with your best performing campaign beyond the 5000 downloads?