I'm trying to decide whether it would be better to use traditional or simplified characters for an iPhone game I'm making. If something is written in traditional, how many people will be able to read it? If something is written in simplified, how many people will be able to read it? From my research it seems most people can read simplified.
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More people can read simplified than traditional, by a significant margin. There are roughly 1.3 billion people mainland China where simplified has been the standard since the 50s and 60s. Taiwan and Hong Kong, the three places traditional is the standard, total about 32 million between them (23 million in the Taiwan/ROC, 7 million in Hong Kong, 2 million in Macau). There are a lot of people from mainland China and Chinese outside of countries where Chinese in the primary language who can also read traditional, but I have no clue on the numbers.
Most people can get by more or less when reading the other character set because there are a lot of very standard substitutions. It is however easier to read simplified if you only know traditional.
Example substitutions (some standard ones):
Tools to convert between the two are readily available, although, as Ironfrost points out, these tools have a lot of problems with some of the 1:many conversion choices. Look at his comments below.
You are correct. Most people read simplified with the exception of Taiwan and HK (although, they can read it too).
Most Chinese can read the both. The reason is that only a small portion of Hanzi are different between traditional and simplified Chinese. (in other words, only a small portion is simplified from traditional version to simplified version.) Most Hanzi are the same. In mainland Chinese, you still can see traditional hanzi everywhere like plaques, posters, chess, academic philological periodicals. In Taiwan or Hong Kong, people also use some simplified ones in handwriting.