The free to play business model has been the backbone of Facebook games, iPhone games, and even saved some MMO’s such as LOTRO and Champions Online. The basic working are that while you can play a majority of the game for free they make it faster to get content by paying smalle fee of usually up to 10 dollars for something really good. It seems Microsoft may smell some money and they want to let Free To Play games come onto their console.
IGN grabbed a quote from what they called a trusted source that saying “[Microsoft] will allow publishers and developers to release games through the service for free where users can then purchase additional content, such as weapons, experience points, in-game currency, and perks.” It is still just a rumor, but it could be a very big deal. The only true issue being Microsofts tendency to lock all online simultaneous play behind the door that is an Xbox Live subscription. As far as Free to Play games go it almost defeats the purpose if you have to pay an extra fee anyway.