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You will need at least 1,000 ad views to make $1.00, and I have heard mobile CPM rates are going down (this could be a result of time of year as all CPM rates dip in Jan-May) so you may only get 70 cents for 1,000 ad views. So you either get 1,000 people to download it for free, look at one ad, or sell the app to 1 person for 99 cents and after Apple takes their cut you make the same money. If you can get people to pay more than a buck for the game, you can do the math to figure out how many free downloads it will take.
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Erm, it's not like that. Seriously, when it comes to money - get real-world data because someone might find it as true when it's not.<br />
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I'm using ads in my apps and CPM rates are around $1.5 - $2.0, so when You go with it in big numbers it's really a big difference.<br />
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As for bussiness model - the answer is simple: it depends from app to app. Guys above showed most of them, but You job is to use Your brain and work it out. Still can't figure it out? Go to Google Play and download top free apps and play with them for a longer period (sometimes ads are after, let's say, 10th level - after You are little catched up), then go with paid apps if You want to (or freemium - maybe even better).<br />
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Go, research. For starters - get Your hands on this: <a href="http://www.google.com/ads/admob/businesskit/introduction/" target="_blank" class="link link--external" rel="noopener">http://www.google.com/ads/admob/businesskit/introduction/</a> Worth reading.<br />
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Then, You might want to read these: <a href="http://forums.makingmoneywithandroid.com/" target="_blank" class="link link--external" rel="noopener">http://forums.makingmoneywithandroid.com/</a> AFAIK, best resource on making money on Android.<br />
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Afterall, if comes to two things - number of downloads (marketing) and retention (experience).</div>
