Electronic Arts is to release a free online version of the popular Battlefield game to be supported by adverts and micro payments. The PC game, Battlefield Heroes, will be available only online later this year, and will not be sold in shops.

The move marks EA's first major attempt to tap into new sources of ad-driven revenue in Western markets. The firm has a free version of its Fifa game in South Korea, earning more than $1m a month through in-game sales. "Online gaming has a massive audience," - said EA's Gerhard Florin, in a statement.

"People want to play games in new ways, with easier access that is quick to the fun. With Battlefield Heroes, EA brings its first major franchise to North America and Europe with a new distribution model and pricing structure adapted to the evolving way that people play."

The video games industry is taking its first steps away from a retail-focused sales environment and towards digital distribution. EA hopes the model of a free game as download that is supported by adverts and micro-payments could be applied to other franchises it owns.

The new version of Battlefield is designed to have more mass market appeal than current titles in the series, which have sold about 10 million copies worldwide.

The games has a "cartoon-feel" and has been made simpler to play, with more emphasis on participation and fun than skill and strategy. Ben Cousins, senior producer at Dice says that no adverts would be appear in the game itself: "They wouldn't work inside the fictional world. Instead, adverts will appear on the website and the 'front-end' of the game." Gamers will be able to buy items which customize their appearance in the world, but will not be able to seek an advantage through buying weapons.

Mr. Cousins said Battlefield Heroes was about exploring new revenue models as well as making a game more accessible: "I've always felt there was some really good fun core gameplay which was locked away by several barriers to entry: the game is complex, it is full of skilled people, you need quite a high-end PC on which to play and you need to go to store to purchase a copy. We're removing all barriers to entry and we hope there is broader audience for the title. You will be able to play this game on grandma's laptop."

Mr. Cousins said EA expected 95% of people who played the game never to spend any money.

"If you look at Korea and Asia this is a model that works. Given the enormous explosion in web-based gaming products, this is going to be a real source of growth in the industry and Battlefield Heroes is the first step towards doing that in West."

The consumer electronics industry has for many years now tried to shoe-horn a game (some would say game-like) experience on the mobile phone device, but this year, Sony swims upstream in the same waters. It has taken the PSP handheld game platform and turned it into a mobile phone -- albeit with limitations. But the value proposition for consumers is win-win.

Sony has partnered with eBay's Skype division and developed a portable version on the VoIP service for the PSP, effectively turning the gaming handheld into a Skype phone -- with the same functionality, as well its limitations.

Here's what we know:

In about 1-2 months, owners of the newer PSP model (the P-2000) will be able to download a firmware update and secure a free application that will allow users to make free PSP-to-PSP and PSP-to-PC calls so long as both parties are in a WiFi hotspot. PSP owners with the Skype firmware update can also make calls to conventional land lines (or cell phones) off the Skype network; however, a per-call charge will be assessed.

Another option, for an additional fee still yet to be determined, PSP owners can also secure a phone number that Skype users on either PCs or portable Skype phone owners can use to call in with. We were told the phone plan would be sold on an annual basis, but again, many of the PSP-Skype details, including pricing of additional services, had not been determined.

Exactly as the Skype service operates in its native PC environment, PSP users are free to call others regardless of location. All that's needed in addition to the firmware update is a PSP-compliant microphone and ear buds. The demo station product specialists on the show floor had rigged a solution using remote control cable -- plugged into the video out jack on the PSP -- and itself connected to the PSP mic for a solution that completes the PSP Skype equation.

Unlike Skype users who tap the service from their PCs, it's not possible to instant message when using the PSP. But other than that shortfall, most of what PC Skype have at their disposal, such as a contacts list and call history line-up are all available via the interface (with options appearing in the Network XME).

Sony says interest in the service is running very high, though it's not clear exactly who Sony is hoping to get on board - teens, who could be persuaded to adopt the PSP as a phone replacement, or older consumers looking to shave pennies and bucks from their phone bills.

As far as how the partnership could impact the traditional carrier networks, analysts GameTap spoke with praised the Skype option, with one, Yankee Research analyst Michael Goodman calling it potentially "disruptive" to carriers.

The immediate upside for Sony is a bit murky, given the service is a value-add and offers no revenue stream for Sony, but one this is certain -- the PSP-Skype configuration drew some of the Sony booth's biggest crowds.

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