One entry into next year's Independent Games Festival will win a guaranteed slot on Xbox Live Arcade and full publishing support, Microsoft has announced.
The platform holder will work with a jury of independent game developers to put together a shortlist for the festival's new 'XBLA Prize', which is planned to be an annual award.
The winner gets a first-party publishing deal to release their title on any and all Live-enabled platform, including XBLA, Windows Phone and Windows. Usability, testing and production assistance will all be offered.
In addition, the winner will also receive funding to help complete their game, if needed.
"Since it was founded in the mid-1970s, Microsoft has always been passionate about independent development and developers," wrote Microsoft's first-party publishing exec, Ted Woolsey in a supplementary Gamasutra blog post.
"Back before Xbox, Xbox Live and Kinect, back before Office, Windows, and even DOS, Microsoft's first products were programming tools for developers.
"We continue to respect and admire the work our developer-partners produce, and one of our main goals as a company is to empower people - consumers and developers - to realise their dreams through our technology."
Woolsey added that Microsoft currently spends more than $20 million dollars every year to fund Xbox Live Arcade games.
"With our business increasing year over year we consider this a smart investment in the ecosystem, and another way we support the independent development community," he explained.
"In that spirit, we're very excited about our multi-year sponsorship of the Independent Games Festival. The IGF has a deservedly great reputation for work it's done with independent games and developers."
Past IGF entrants include the likes of Minecraft, Limbo, Machinarium, World of Goo, Bit.Trip Runner and Braid. The 2012 event takes place in San Francisco from 5th to 9th March.
Earlier this year, World of Goo co-creator Ron Carmel penned a much-discussed report in which he suggested that Microsoft's XBLA service has peaked and independent developers are starting to take their business elsewhere.