UPDATE: Yesterday evening after our post went up, Zynga's What's the Phrase moved from no. 3 to no. 1  for top free games in Apple's App Store and is currently holding down the top spot.

Zynga New York hasn't always had the chummiest relationship with Zynga's corporate office back in San Francisco. The East Coast outpost was formed a year ago after Mark Pincus acquired OMGPOP and its mobile juggernaut Draw Something--installing OMGPOP CEO Dan Porter as general manager.

Things started to sour last fall when Zynga blamed a $95.5 million write down on its $183 million OMGPOP acquisition for a bad quarter. But after a round of office closures, Zynga New York remained open, which is in line with gaming giant catching the all-mobile-all-the-time bug from Mark Zuckerberg. COO David Ko (Mr. Pincus' no. 2 man) also continues to speak highly of Draw Something and the upcoming, Ryan Seacrest-approved Draw Something 2.

Soon he may have even more to crow about to wary Zynga shareholders. 

When we logged into Apple's App Store today, Zynga New York's newest game What's the Phrase was front-and-center, holding down the no. 3 spot for free games. The app, which was launched February 28th, had been hovering just below the top 10 games last week, a Zynga representative told Betabeat.

Like other Zynga titles, What's the Phrase takes its cue from old school American pastimes like Scrabble and Pictionary--updating them with a social twist. In this case, "Wheel of Fortune," since players take turns guessing vowels and consonants that form a hidden phrase.

The company said a team of ten mobile developers from Zynga New York were responsible for the app and that it managed to climb up the app charts organically, without much promotion. This is good news for Zynga, which has had to acquire hits (like Words with Friends) in the past.

Considering Pat Sajak is still on the air, though, What's the Phrase is gonna have to find a different monetization path than Draw Something, which has an upcoming game show (produced by Mr. Seacrest) and is following the Angry Bird model of extending its brand beyond your smartphone screen.

But Zynga HQ doesn't sound ready to cede dominance to New York just yet. A representative pointed out that Running with Friends, a new game currently in beta in certain markets, was developed in San Francisco. With that name, we expected a quantified-self app that forces you to humble-brag marathon times (with friends), but apparently the game is Mr. Pincus' version of Temple Run. Maybe Zynga should change its name to Copies with Friends?

Mr. Capucilli.

Earlier today Betabeat posted a memo: How not to sell your indie iPhone game, a list of tactics that didn't work. Matt Capucilli, a freelancer who lives in the East Village, built the no. 1 iPad app currently on sale. Video Time Machine, a curated collection of videos categorized by time period and type and just $.99, got picked up by Apple and featured in the App Store last Thursday. Since then, Mr. Capucilli has earned "what could be considered one person's salary," for an entire year.

The app beat out Angry Birds for iPad and the iPhone version is hovering at no. 2 in the entertainment category. “If we hit number one in the iPhone app store, it’s going to be over. Game over! Retirement!” Mr. Capucilli told Betabeat over beers at last night's East Village Tech Meetup.

So how do you get to be the no. 1 selling iPad app? There's not much you can do, Mr. Capucilli said. He built the app about two months ago for his friend Justin Johnson (Brooklyn) who along with Del Shoopman (L.A.) had created an internet-popular but just marginally profitable website, YouTube Time Machine and wanted an app for it.

They hosted a launch party for the iPhone and iPad apps and hired a PR firm to field calls to and from media, which has been helpful, Mr. Capucilli said, but to which he does not attribute much of the app's success.

There are a few things you can try, he says:

1. Make something cool.

2. Make something Apple will like.

3. Have a good icon.

4. Have a friend who works at Apple on the App Store. (He doesn't, but seems like good strat.)

"You can't do anything. The only thing you can do is make something awesome and innovative. Not to toot my own horn, but I'm only saying that because it's true. It's Apple's discretion because in order to get anywhere in the top ranks--unless you're a huge gaming company with a bunch of titles--but if you're on your own or you're a small company, is for Apple to recognize your product, look at it and feature you," he said.

The Video Time Machine, which he designed and coded, is his second iPhone app, he said. His first app, a game called Clock Blocks, was moderately successful; it earned "five figures" in profit, he said. Before that he was a Flash developer for five years.

Based on how many people rate an app, he said, he's estimating that the current no. 1 iPhone app--Street Fighter--makes $50,000 a day. The days of the iPhone app millionaires might be over, but indie developers still have a shot at the big time.

Correction: This post originally had Del Shoopman's name wrong. He is Del, not Doug. Betabeat regrets the error.