Free-to-play games heading to Xbox Live?

Microsoft could be bringing free-to-play titles to Xbox Live Arcade at some point next year, if reports are to be believed.

A source told IGN that the Xbox 360 manufacturer will be allowing publishers and developers to release free games through its digital service that allow users to purchase additional content to aid their progress.

It’s a move that harks back to the original announcement of Joy Ride, before it became a Kinect title. At E3 2009, Microsoft announced the game would be free to Xbox Live members, but players would be able to purchase additional vehicles and other customisation options.

The free-to-play model has generated significant revenue for several games firms, including Zynga (thanks to FarmVille and CityVille), EA (with Battlefield Heroes and no doubt the upcoming Battlefield Play4Free) and Capcom (with the parent-bankrupting Smurfs’ Village).