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LOS ANGELES (Reuters) – Microsoft Corp. (Nasdaq:MSFT – news) on Monday will announce the availability of software tools aimed at encouraging independent and hobbyist video game makers to create titles for its new Xbox 360 console.

The move from Microsoft, which kicks off its two-day Gamefest video game development conference in Seattle on Monday, comes as the popularity of user-created content on the Internet grows and as the software giant builds a large audience for its Web-connected Xbox Live online service.

Microsoft said its tool kit, called XNA Game Studio Express, will make it easier for enthusiasts to create games to run on Microsoft’s next-generation Xbox 360 console or personal computers running its Windows operating system.

A test version of the tool kit will be out by August 30. The final product will be available this holiday season for an annual subscription of $99 per year for Xbox 360 game development. The software will be free to people making games to run on Windows.

Microsoft said more than 10 universities, including the University of Southern California and Southern Methodist University, will include XNA Game Studio Express and Xbox 360 development in their fall curricula.

YouTube is a wildly popular Web site featuring videos from ordinary people around the world. Its star has risen as Internet giants Yahoo Inc. (Nasdaq:YHOO – news) and Google Inc. (Nasdaq:GOOG – news) have been investing in user-generated content such as Web logs, known as blogs, and video.

Peter Moore, vice president of Microsoft’s interactive entertainment business, said individuals will own the games they create using the tools and that the company will do revenue sharing deals with people who create games for the Xbox 360.

“I’d love to send a royalty check to a kid,” said Moore, who added that Microsoft hopes to get the tool kit into high schools.