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Microsoft has announced plans to share a percentage of in-game advertising revenue from MSN Games with its casual game developers. Developers of web-based titles found on MSN Games will be eligible to take advantage of the new Ad-Share Program.

Funds will accrue monthly for those participating in the Ad-Share program, with developers receiving a percentage of the gross revenue achieved from the advertisements shown during online gameplay for their title(s), including ads served during the loading screens at the start of a game or in between levels.

Ads placed in or around the game window during gameplay will be counted toward the total revenue figures as well.

Microsoft estimates that the developers of the five most popular titles on MSN Games participating in the Ad-Share Program could potentially share somewhere in the neighborhood $250,000 annually, a figure based on current in-game advertising revenue rates.

It’s a two-tiered revenue sharing program; here are some of the details:

•   Level I requires little to no change in the development and submission process and offers developers 10 percent of the total in-game advertising revenue generated by their title(s).

•   Level II offers developers an increased advertising revenue incentive of 20 percent and requires a few additions to the game development process, such as localization, Entertainment Software Rating Board ratings, and the creation of a “deluxe” game experience that offers players at least 10 hours of engaging free Web-based gameplay.

“Casual game developers traditionally operate on a limited revenue model, typically receiving a set fee from downloadable titles or a small royalty associated with game subscriptions,” said Chris Early, studio manager for Microsoft Casual Games at Microsoft.

“Now, by sharing in-game advertising revenue, we’re allowing a more diversified business model that gives our partners more resources to create new, innovative titles for the 13 million people we see every month on MSN Games.”

Developing longer, more immersive titles is a sure fire effort by Microsoft to increase the time on site of its user base and bolster its advertising network. The company will also undoubtedly use the platform as a method of advertising its over services, namely Live Search.

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