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Rumor: Free-to-Play Coming to Xbox 360

Microsoft may be plotting to overhaul Xbox LIVE with micro-transactions, free-to-play game support.

Good news, gimme-free-stuff fans: It sounds like Microsoft's planning to invite the Xbox 360 to the free-to-play party soon. Develop reports the company's actively working with developers to get the free-to-play ball rolling, prepping a micro-transaction backend for Xbox LIVE to facilitate an incremental-spend customer engagement system.

Microsoft's reportedly looking at two common free-to-play models: in-game items and premium upgrade tiers. Games based on the former model usually allow players access to most features, but charge small amounts for special items or the option to "shortcut" game processes by paying for fast-track upgrades. The latter makes everything below a certain threshold free, then charges if players want access to higher-placed premium content (sometimes called "freemium").

Develop says it's heard a newer version of Microsoft's Xbox 360 operating system will facilitate micro-transactions, allowing players to easily purchase in-game items using the company's established virtual currency, Microsoft Points.

If the rumor's true, it's probably timely. Steam recently debuted five free-to-play games through its PC-exclusive digital distribution service, following that with a free-to-play version of Team Fortress 2. And massively multiplayer online games like Lord of the Rings Online have gone free-to-play en masse. It's not hard to see why: Turbine, the publisher of Lord of the Rings Online, revealed in a December 2010 podcast that the mammoth fantasy game's revenue has essentially tripled since the service went free-to-play in September 2010.

Critics of freemium systems argue it can wreck the play experience when applied to more serious or multiplayer-specific games, attracting noncommittal or "casual" players with nothing invested, and who can upset a game environment's delicate economy. I'm less concerned about that in a console environment, but I am curious to see whether it might work as an offset to in-game advertising. Freemium I can deal with. BUt in-game ads, by contrast, make me want to shut everything down, snap a bunch of game discs in half, and throw the whole mess out a window. See: Will In-Game Ads Be Less Annoying if Kinect Lets You Interact with Them?

Microsoft's response to the Develop story? No comment.

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