Tap Tap Revenge 3, Not Long To Go

The Apple iPhone and iPod touch is the hottest platform in portable gaming, and one of its brightest early success stories is Palo Alto-based Tapulous, led by CEO Bart Decrem.

Decrem dropped by today to tell us that Apple is reviewing the latest edition of its mega-hit music game, "Tap Tap Revenge 3," which is set to launch sometime next month.

Packed with new social and in-app commerce features, "Tap Tap Revenge 3" is a major advance for the series, which has had 15 million total downloads, more than 11 million unique users, and more than 500 million games played since it launched less than 15 months ago. ("Tap Tap Revenge" started as an iPhone tribute to rhythm games like "Dance Dance Revolution" and "Guitar Hero." But it has since grown into its own, with custom editions featuring artists like Lady Gaga, Weezer, Nine Inch Nails, etc.) Decrem says they're doing about 2 million plays a day now.

And the new game could be a nice revenue generator for the small startup, which is already profitable.

In addition to advertising, sponsorship, and affiliate revenue, "Tap Tap" players will be able to purchase in-game avatars and a growing library of songs from actually famous artists, as labels and artists grow closer to the "Tap Tap" series and the iPhone in general. Revenue from song sales -- two tracks for £0.59, or six tracks for £1.99 -- is split between Apple, Tapulous, and the labels.

Further, because Tapulous must charge a nominal, £0.59 fee for the app -- Apple requires it for apps using in-app commerce -- we estimate that alone could eventually generate £2 million or more in revenue for Tapulous.

Overall, we estimate Tapulous could do £4-6 million in sales this year. Decrem declined to comment on revenues. But he confirmed that the company is profitable.

And what's next?

Earlier this month, Decrem demonstrated a new music game the company is working on at Apple's iPod event. It's called "Riddim Ribbon," combining music and racing, produced in conjunction with "The Black Eyed Peas" front man Will.I.Am. It's still in development, but looks cool. We imagine it should be ready by the holidays.

In about a year, Tapulous should have enough of a social gaming platform built that it could expand beyond music games, if it wanted to. And Decrem says the company will eventually explore other mobile platforms, as well, potentially starting with Google's Android. (First, Android needs to make improvements to its commerce platform, which is not as simple and convenient as Apple's.)