How many users do you have for $700 a month on GAE?. My game Neptune's Pride that also makes about $2500 a month and has about 1000 - 1500 DAU only costs around $100 a month.
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Only about 200 DAU (3K MAU), some are paying and the rest are on a 30-day free trial. But we do a lot of processing for each user. For example, we have a unified inbox for all your mentions and messages from all your social networks, so we pull a lot of posts on a regular basis. Our database has 3.7M records, and a total size of 15GB (8GB for data + 7GB indexes).
I expect the cost per user to go down as the percent of paying to trial users goes up. Trial users stay for 30 days, and then most of them stop. But paying users continue using it much longer. Also, there is a lot of room for optimization, which I'll get around to doing later, once the key features are in place.