Microsoft turns to users for new wave of Xbox games

SEATTLE (Reuters) - Microsoft Corp will turn to users of its Xbox 360 to create new video games and broaden the types of games available on its console, taking a page out of the strategy books of Facebook and YouTube.

Guests play the Xbox 360 "Halo 3" Multiplayer Beta video game during a preview party at Quixote Studios in Los Angeles May 15, 2007. REUTERS/Mario Anzuoni

The world’s largest software maker said on Tuesday that it will start selling “user-generated” games later this year on its online Xbox Live service and share up to 70 percent of revenue with the game developer.

Microsoft began offering game production tools in 2006 to amateurs and hobbyists under an initiative called “XNA,” which allowed developers to create a game that could run on the Xbox, a Windows-based computer or its Zune media player.

User-created content is the backbone of many advertising-supported Web sites such as Facebook and YouTube, but the video game industry has relied mostly on deep-pocketed developers to create sequels or games based on licensed properties.

Facebook and YouTube provide a forum for new software applications and videos for free, but they do not share advertising fees with users.

Microsoft, however, requires the prospective video game developer to buy a $99-a-year premium membership to the XNA Creators Club, but offers a slice of the revenue.

The games will be sold on the Xbox Live Marketplace at three different prices -- the equivalent of $2.50, $5 or $10 -- using Microsoft points.

In order to get the game into the Xbox Live store, the games must pass a peer-review system.

“Not only are we democratizing game development with Xbox Live Community Games later this year, but we’re creating an opportunity for aspiring developers,” Chris Satchell, chief technology officer at Microsoft’s Interactive Entertainment Business group, said in a news release.

Microsoft expects the games created by users will double the number of games available for the Xbox 360 when the Community Games section of its Xbox Live online store comes out of “beta,” or test, mode in the fall.

Reporting by Daisuke Wakabayashi; Editing by Derek Caney