Sources are claiming that Microsoft plans on launching free-to-play games on its Xbox Live service. This is rumored to go live sometime next year.
As IGN reports, game publishers and developers will be able to release games through the Xbox Live service for free. Users can then purchase additional content such as weapons, experience points, in-game currency, and perks though Xbox Live.
To give an example, the game 'Joy Ride' for Kinect was originally a free-to-play game for Xbox Live Gold and Free members. Microsoft ended up changing its business model on this game later on. Game modes and environments were planned to be free while customization options were going to cost Microsoft Points (Xbox Live currency).
This is a great way for Microsoft to expand and dominate in the game industry. Microsoft already offers $60 console games on the Xbox 360 but can now offer cheaper games to those with the Xbox Live service. Microsoft has benefited from this service in recent years as Xbox Live has grown past $1 billion dollars in annual revenues. Microsoft gets a 30% cut of every game purchased though Xbox Live.
Free-to-play games are hot right now especially on Facebook, iPhone, and Android. Microsoft hopes to capitalize on this sometime next year using its Xbox Live service.