Microsoft is finally going to test the free-to-play model. While there were rumors that they planned to experiment with the free-to-play model previously, this never came to pass; but Microsoft has remained interested in it.

Happy Wars which was developed by Japanese developer Toylogic, and will be the first free-to-play release that will offer a microtransaction model to generate revenue. The game will only be free-to-play for Xbox Live Gold subscribers, which is not really a surprise, as that is pretty normal for Microsoft as nearly every online service requires an Xbox Live Gold account.

While Happy Wars will be the first title to come out using the free-to-play microtransaction model, it isn’t the only one that Microsoft has planned. Signal Studios is working on Ascend: New Gods which will also use the free-to-play microtransaction model; but it isn’t slated to arrive till early 2013, so Happy Wars will come out later this year.

While Microsoft has experimented with a number of free games, including the free Doritos titles, Toyota inspired Yaris, and 1 vs. 100, none of these took advantage of the microtransaction model; but the games were experiments at different types of models and marketing. Some were successful, while others were not so successful.

What remains up in the air is whether these titles will use real world currency or Microsoft Points for the microtransactions. While rumors continue that Microsoft is looking at doing away with Microsoft Points, so far the company has denied this.