I think its pretty obvious he means % wise. Gears of war made fare more profit in raw numbers. so the statement essentially means nothing

Not quite right. The price is actually $7 for IB2, but here's some coverage of Epic's press release in January boasting $5 million net earnings (meaning ~$7 million gross, meaning around 1 million purchases that month, though possibly less due to in-app purchases).

http://www.joystiq.com/2012/01/05/infinity-blade-franchise-surpasses-30-million-in-revenue/

The original IB grossed $23 million in its first year and is still charting in the App Store's top 100 paid apps at a reduced price of $1 (launched at $6, IIRC, so around 4 million sales in that time period, though IAPs and sales will distort that number).

its not more profitable, it was just easier to make and made more money vs how many man hours it took to create the game.

If infinity blade took 100 people 1 year to make the game and profited 10million dollars and it took 1000 people 1 year to make gears of war 3 and it profited 90million dollars then gears of war is more profitable.

mobile games will grow but xbox/playstation will still be where the gamers live.

Nice spin.

The calculation was like this: (numbers out of thin air, not realistic, just for this example!)

Infinity Blade
development costs: 500k
revenue: 2 million

--> 4 times the development costs
--> 1.5 million USD profit

Gears of War
development costs: 20 million
revenue: 60 million

--> 3 times the development costs.
--> 40 million USD in profit.

So yeah, Infinity Blade is more profitable if you just look at the % compared to the development costs! On the other hand, you need 25 Infinity Blades to get the money Gears of War made. And ths is where this industry is heading to. Overheating mobile / facebook / social gaming.

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.