Infinity Blade: Epic's Most Profitable Franchise* ~ Even more than Gears of War!

[famousringo]

spurgeonryan said:
I wonder how much these companies are making on there ads? I have not seen them on my Kindle, but I have on my phone.

Advertising revenue is highly variable. It depends on things like what kind of clientele are likely to download your app, how frequently your app is used, and how many ads you can throw up in your users' faces while they use them.

From what I've read, ad revenues rarely, if ever, exceed $1 per download for the developer. If all else were equal, they'd be better off charging a nominal fee for their software. Of course, not all else is equal, and an ad supported app may very well generate substantially more downloads, and therefore more revenue, than a paid app. Which route is better really depends on your product and the market you're selling it in.

Hard information on how big these markets are is really hard to get. Here's an analysis of all Google's mobile revenues for 2011, cobbled together from financial statements, congressional testimony, and no small amount of guesswork:

http://www.asymco.com/2012/05/14/the-android-income-statement/

You can see by the two gold bars, one from app revenues and the other from AdMob revenues, that Google pays out a little more money to devs from advertising revenues than they do from direct sales. About $200 million in 2011. This is really murky number though, because the AdMob revenues represent an unknown fraction of all mobile advertising revenues, and also includes revenues from non-Android platforms. 

Even so, when you contrast that estimate with the latest estimates of App Store revenues, it's clear that while there's serious money to be made in mobile advertising, the biggest bucks come from direct payments. The App Store is projected to generate $4 billion dollars in gross revenue in 2012.