As has been becoming clear throughout 2010, success on the App Store isn't about downloads per se.

Instead, it's about the regular activity of your user base, as measured in million of daily or monthly active users.

Get enough of them and, for most games, you can monetise them through ads or in-app purchases in a free game much more successfully then trying to sell them a paid product upfront.

Millions of words

The latest company to talk about this is US developer Newtoy, which launched with Chess With Friends, before finding success with Words With Friends. It also developed ngmoco's We Rule.

In a nice Gamasutra article about freemium apps - which also has input from ngmoco and Get Set Games (of Mega Jump fame) - it's reported the combined revenue of the paid and free versions of Words is over $1 million monthly.

The reason?

It has an audience of five million monthly active users, which amounts to over 250 million minutes of gameplay and one billion ad impressions each month.

Indeed, such is its power, that agency Burstly is offering other developers the ability to position their ads within Words With Friends.

[source: Gamasutra]