Microsoft officially announces Game Room, a retro arcade space for Xbox LIVE and Games for Windows LIVE.

During the recent CES 2010 keynote address, Microsoft announced their new retro arcade space, Game Room. It will allow you to play 1000 retro games and customize your own arcade space while letting you compete against your friends. Each game will have achievements you can play for as well as universal leader boards so you gain bragging rights. You will be able to send out challenges to your friends and they can visit your arcade space to play demos of your games while they are there. The whole concept sounds a bit like Sony's PlayStation Home but a lot more fun.

Microsoft is taking an interesting approach to the pricing plan. Game Room will be free for download and games will cost you between 240 - 400 Microsoft points. They are also letting you play them really old school by plopping down 40 MS points for one play until you die. I'm really curious to see how this pricing plan works out and if other people will try the same approach.

Game Room will be released this spring for Xbox LIVE and Games for Windows LIVE. 30 out of the 1000 promised games have been announced so far including Centipede and Asteroids Deluxe. Check out the launch trailer after the break.