Gameloft, the french mobile game maker of such hits as Assassin’s Creed, and The Settlers have announced that they ‘and other software developers were reining in their Android development budgets because the app store was not as nice as iTunes (very true) and they weren’t making as much revnue as iTunes (expected.)

The article doesn’t mention which other developers are cutting back, but quotes Gameloft finance director Alexandre de Rochefort,

We have significantly cut our investment in Android platform, just like … many others,

This announcement that they have cut their investment is interesting but not really a surprise if they are measuring the investment with direct sales, given they have a duty to their shareholders. However, I don’t believe this news is a ‘death knell’ for Android but merley the decision of a public company to scale back investment in an unproven market.

The news that they are selling 400 times more games on iphone [than Android] and that iphone apps are 13% of its profits is a sign of a successful and mature [in relative terms] market. What this report does not tell us is how much they had invested in Android Apps, nor how much they have scaled back.

Given that Android has the potential [at least according to Gartner] to leapfrog the iPhone by 2012, one would hope that Gameloft continue to invest in Android development, even if it is billed as ‘research and development’ rather than immediate income generation.