The Redmond-based firm has described the move as a "progressive program" which is "designed to help foster increased innovation in the casual games space" and "empowers casual game developers with a much-needed new revenue stream".
MSN's Games portal, which hosts titles like Luxor, is one of the web's largest casual games locations and a hot location for internet-based in-game advertising. Developers with titles on the service will get a percentage of the gross revenue made by ads shown during online gameplay for each of their games (either during loading screens or next to a running game).
Microsoft reckons the five most popular titles on MSN Games participating in the new 'Ad-Share Program' are likely to share nearly $250,000 annually.
Chris Early, studio manager at Microsoft Casual Games, explained: "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.
"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."
There are two grades for the Ad-Share Program. The first gives developers 10 per cent of ad revenues for unmodified games that are submitted and hosted
However with a little bit of compliance and tweaking, adhering to guides on localisation, ESRB rating, and the guarantee that the game has a 'deluxe' mode which offers players 10 hours of free gameplay, developers can qualify for a second grade that can get them up to 20 per cent of ad revenue.
Those studios interested in joining the Ad-Share Program are invited to speak with their Microsoft distributor for Game Developer Kit details. Independent studios are can contact Microsoft's Casual Games team via MCG@microsoft.com