tarver-2Tarver Games is announcing today it has formed a game studio to develop games for the iPhone. The company’s first major title is Ghosts Attack, a location-based shooting game for the iPhone that gives you a different arena to fight in, depending upon your location.

The game uses your location and Google Maps to automatically generate game environments on the screen that mirror the real world. It’s a kind of alternate reality game, since the story of the game has you rescuing scientists that have been sucked into a parallel world.

The Santa Monica, Calif.-based company is the brainchild of game industry veteran Chris Cross, who spent nine years at Electronic Arts as lead game designer of the hardcore Medal of Honor shooting games, and Quinn Banks, a business consultant steeped in Asian business practices.

In an interview, Cross said he burned out on the traditional console game industry a few years ago because it was hard to do original titles and sequels were the only safe games to make, given the high costs of game development. Cross considers that to be a meat grinder for creativity. The iPhone appealed to him because it didn’t require huge investments or big teams, and he could distribute the titles on the AppStore without a publisher. He got together with Banks to start the company in July, 2008.

tarverWhile there are more than 16,000 games available on the iPhone, Cross said the age of the low-hanging fruit in making iPhone games is over and that we’re now moving into a stage of consolidation which he dubs “falling ladders.” That’s where the business may shift into the hands of companies that are building larger businesses.

Banks said the company talked to a lot of VCs, but they didn’t really see the iPhone as a ripe investment opportunity. It’s almost more suited for lifestyle businesses, where someone quits a day job to make iPhone games full time, rather than a business for venture-funded game studios with 30 people. Banks said the company is raising angel money now.

Tarver currently has seven employees. It created its first game, a strategy title called Cold War, in April in order to understand how to make iPhone games. With the Ghosts Attack game, the company wanted to create something that takes advantage of the iPhone — hence, its use of location-based information. It also uses the iPhone’s touchscreen and accelerometer. The latter lets you control the action on the screen by tilting the phone. The game has 17 missions.

Ghosts Attack will debut later this month on the iPhone for $4.99. More episodes will be released for 99 cents each. The company expects to have a Facebook version of Ghosts Attack as well. Other titles coming this year include BrickMan, where you break bricks to make money for your girlfriend. If the titles are successful, the company plans to launch them on other platforms such as game consoles over time.