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Now that our game has been out for six months, it has finally become clear to me that our plan was not economically viable. There were human errors involved and I'm not going to say we didn't make some mistakes with marketing and pricing, but there are a few lessons I learned that I'll be taking with me on my future projects.
1. If you do not have a big IP behind your game, give your game away for free. Out of the top 100 paid iPhone games right now, something like 70 of them have very fancy-pants licenses. This is extremely important to the average iPhone gamer, who really is just trying to avoid getting screwed. This is their motivation for gravitating towards stuff they've heard of; they feel that it is reliable.
Customers are more willing to experiment and try out your non-fancy-pants-IP game, but only if it's free. Players don't have to invest money to see if the game is well made and/or something that they'd enjoy.
Reasonable, fair in-app purchases (IAP) are a much better way for you to make money. This is all, of course, assuming your game is a relatively new idea; but if it isn't, then why are you making it?
2. Try not to spend more than $30K on your iPhone game. That is, assuming you care about making any profit on the game. 100 Rogues is by no means a "failure" of an iPhone game -- again, it was well-received by the critics, had good press on iPhone gaming sites, etc. We're six months in, and we still are very optimistic about our future, but we haven't come close to making ends meet.
Also keep in mind that "small scope" does not mean "bad." Some of you probably still have a Tetris-loaded original Game Boy next to your toilet. Tetris is 32 kilobytes of monochrome graphics and some kick-ass game design. Great game design doesn't cost tens of thousands of dollars; it just requires some understanding and care -- take advantage of that!
3. Prioritize additional content. You can probably sell one single item as an IAP if you market it properly. Giving extra content away for free is great and can send a really great message to your fans, but you have to make sure that what you're giving away will be something that people really appreciate and understand.
The days of, "Hey, you give me a bunch of money and I'll let you see if you'd like my game" are over, and that's a good thing. I've complained for years about how marketing has been the only thing that seems to matter for a games' success... a game could be horribly broken and boring, but if it has a standee at GameStop, it'll be a hit (I worked there for awhile and saw this happen first-hand many a-time).
If players can freely access all games, then word of mouth about the quality of the game will be far more effective in bringing the good stuff to the top. The App store is extremely top heavy, we all know this, but if developers all start to target the "Free Apps" section, I think that section would be a lot looser and a lot more well-rounded.
How do you make money? In-app purchases. Zynga is worth more than EA and their game is FarmVille. (Is your game as good as Farmville? It had better be at least that good, or else why are you bothering making such a terrible, terrible game?)
Don't bother putting ads in your game. Players hate it, it makes no money (we tried it, believe me), and it ruins what little art direction you can afford to create and then fit on that little screen.
Give players a great, solid, complete game that they can play forever -- for free. Then dangle totally awesome stuff in their face that you know they're dying to use for a fair price. Players will actually want to give you money if they really like your game.
Hopefully the experiences I've shared here will be of use to other developers in trying to market their games. Remember: this change in the way the market works is good for all developers and all gamers. The only people it's not good for are the investors -- the people whose only role it is to put up tons of money up front in the hopes of getting some back.
As I'm sure you're aware, the relationship between these people and the actual content-producers in all artistic industries has been rough, to put it very kindly. However, things are changing for the better - we just have to stay in touch with how they're changing if we want to succeed. It's an exciting time to be a game developer!