This little snippet in the midst of an article about Xbox360 and online gaming. This from Chris Early, studio manager for Microsoft Casual Games Group.

Can Microsoft Score in Mobile Gaming?

Today, Microsoft makes money on games through sponsorships, advertising, and subscriptions. How do you see the business model evolving?
The biggest change that I think we’ll see in the next year is in microtransactions becoming a viable method of purchasing games and new game levels. You’ll be able to use micropayments to pay for downloads within Marketplace and Xbox Live Arcade. You’ll be able to purchase points at a retail store or online with a credit card and to purchase games with those points. You’ll also be able to earn points for gameplay.

Why are you moving into micropayments?
This allows us to have a much finer granularity in what people can purchase. You can’t purchase five cents worth [of products] on your credit card — fees make that prohibitive. We also want to offer a payment mechanism for people who don’t have credit cards.