Next-gen Xbox Live may allow users to sell custom content

Fresh speculation about the capabilities of Microsoft's next-generation Xbox Live service has emerged, with the US Official Xbox Magazine reporting that users will be able to create and sell their own custom content in some games.

The first details of the new Live services, which will be a compulsory part of Xbox 2 games, were revealed by Microsoft VP J Allard at the Game Developers Conference last week, with one of the most notable updates being a micro-payments system that would allow companies to sell small pieces of add-on content for their games, such as skins, vehicle mods or maps.

Now OXM is reporting that this functionality may be extended to users as well as companies - allowing players to create and trade their own in-game items, although presumably the game would have to provide some creative tools for this to be possible in the first place, so we wouldn't expect it to be a feature of every title.

The move would tie in with a number of comments made by Allard during his GDC keynote, where he noted the rich environment of mod-makers and content creators which exists on the PC platform.

Assuming that the Xbox custom content creation system works similarly to the system for distributing developer-created content, we'd expect a model where the creators would receive a small credit to their Xbox Live account when someone buys a piece of their content, with Microsoft - and possibly the publisher of the title - skimming off a transaction fee from this payment.

Since we wouldn't expect there to be any way for users to "cash out" small sums of money from the system, those payments would go on to be spent on other Xbox Live content - essentially creating a closed economy for the benefit of Microsoft and the game publishers.

This is, of course, all speculation based on a magazine story, and the reality may be quite different - with one strong possibility being that custom content trading will be possible, but won't be tied into the micropayments system at all.

However, the opportunity is certainly there for Microsoft to create significant revenue from content created by the players themselves - and it's hard to see the company leaving those dollars on the table, especially in light of the industry response to the firm's plans for the Xbox Live marketplace.

"We believe that an online market place will provide varying high-margin incremental revenue opportunities for all of the major video game publishers with the Xbox 2 over the next five years," American Technology Research analyst PJ McNealy commented yesterday.

McNealy cited a conversation with Activision CEO Bobby Kotick earlier in the week, where Kotick said that under Microsoft's proposed system, a game with an additional downloadable level could add $3m to $5m of revenue with 50% margins - an attractive option for any publisher.