Community games will be listed on the slick new Xbox Live interface that will debut by this year's holiday season. A handful of games will be highlighted on the "front page" of the section, in return for an additional 10 percent to 30 percent commission that Microsoft will charge.

The games will include free trial periods, handled by Microsoft. They'll also be sold at three price levels, using the Xbox Live point currency -- 200 points, 400 points and 800 points.

Community Games will debut this fall in the U.S., Canada and a few European countries. Other countries will be added in 2009.

There are potentially thousands of games for the service - Microsoft said it's XNA game development toolkit has been downloaded more than 1 million times since it was released in 2006 and it's now used in more than 700 universities.

I wonder if game studios will also distribute games through the Community Games page on Xbox Live. They could use it to test concepts or features and see how they're received, before incorporating them into bigger titles. Multerer said Microsoft would welcome that use of the service.

Microsoft is also upgrading its Xbox.com Web site so that gamers may peruse and buy games from a PC browser and have them automatically downloaded to their Xbox console.

Speaking to the 1,200 game developers at the event, Multerer also presented new game development tools such as an analytical tool for viewing system performance frame-by-frame during game play.

Satchell also talked about Microsoft's efforts to boost PC gaming, and announced that Microsoft's going to offer free multiplayer gaming on the Live gaming service for Windows. That gives PC players the equivalent of gold level Xbox Live service, with no charge.