His actual income (after Apple and paying the original game creator) was $276k - which replenished the savings he had cashed-out for development time and then gave him several more years of development on sequels/prequels.
Apple only report to you the remaining 70%, so the 800k is after the 30% is deducted.
Edit:
It seems the $800k includes Apple's cut. As an app developer myself, even considering that amount is torturing yourself. Apple _only_ report the remaining 70%, especially when you consider promo codes, refunds, etc... - doing a crude sales*price is somewhat inaccurate.
(Fun fact: I'm an Australian developer. Of the amount I get paid, I also need to deduct sales tax for any sales I make to Australian consumers. For a 99c app, I would make 63c for Australian sales and 70c for other countries).
