Microsoft announces Happy Wars, first F2P game for 360

Microsoft has announced that it will publish free-to-play online game Happy Wars for Xbox Live Arcade. While the Marketplace has hosted games that were free downloads before, Happy Wars will be the first to bring the microtransaction-driven F2P business model common in PC gaming to the Xbox 360. Happy Wars was developed by Japanese studio Toylogic and launches later this fall.
It will be available for free to all Xbox Live Gold subscribers, who can then opt to spend real money on in-game virtual items. It is not clear yet whether the game will sell only “vanity” items, used purely to customize a character, or if it will also let players purchase “power” items, that confer in-game performance bonuses.
Microsoft has promised to support Happy Wars after launch, by introducing more items and character options in future updates. While Happy Wars will be the Xbox 360's first true F2P title, others are already in the works. At E3, developer Signal Studios announced that it would launch the F2P title Ascend: New Gods on Xbox 360 sometime in 2013.
SOURCE: Gamasutra