It depends on the app, the needs and desires of the development team etc.
I do not focus on game apps, but when I did a few the ad click through rate was very low for them. So if I was doing games, I might look for a different revenue model. Pay apps, freemium etc.
It depends on the specific app. Some are better with an ad based revenue model, some are better when sold. European car navigation apps used to sell well. On the other hand, some simple flashlight apps with ads have also done well. So you can make money either way, and which way depends on the circumstances.
I should also say I have seen some new developers release their first app as paid and they make few if any sales. Unless you already have existing business knowledge of a specific area, for most new Android developers, they are usually better off releasing their first app quickly and for free.
I am also wondering about this. I have an app selling at $0.99 and make a couple hundred per month in sales. It's hard for me to project how much ad revenue I could make, especially since I don't know how many additional people would use it if it were free.
