I noticed that the popular "Lets Golf" is listed under "Utilities"? Its from the mighty Gameloft folks, so they obviously know what they are doing.
So what are they doing?
Maybe its better to put your game in "action" and "utilities". Or "arcade" and "entertainment". That is if you put it in "action" pretty much the same people who see it there will also see it in "arcade", but if you put it in a non-game section like "utilities" or "entertainment" it will reach different people, who may not have been looking for a game, but having come across yours will give it a look.
So my question, if you have an action/arcade-style game, what subcategories should you put it under to get the most sales? Is it dishonest/bad to put it in another non-game category in the hopes of reaching new people?