It has been revealed that Microsoft will put in effect a new policy of removing underperforming titles on Xbox Live Arcade. This comes from Xbox Live general manager Marc Whitten, who explained that games which have been out for six months, scored less than 65% on Metacritic and have a conversion rate of less than 6% will be removed.

“This way titles are not just considered if they are not selling well or not getting good reviews, but actually a combination of both,” he said. “We will also give a three-month notice before delisting any title. Overall I think you will find this will focus the catalogue more on larger, more immersive games and make it much easier to find the games you are looking for.”

He also revealed that their team is working on a new digital rights management tool that will allow gamers to better consolidate licenses for downloadable content to a single console for online and offline play.

There is a restriction in place on Xbox Live Arcade, limiting the size of games to a maximum of 150MB. However, that is soon going to change as XBLA planner David Edery has said that Microsoft is considering increasing the file size limit to a more respectable 350MB. He notes that the limit is meant to maintain the platform’s focus on smaller, more accessible games that can be played by everyone.

“It’s a steady progress. We’ve been listening to our partners, listening to our customers to try and get a feel for what’s right,” Edery told GamesIndustry. “We don’t want the size limit to hit the roof because we think there’s some value in promoting small pick and play experiences that don’t cost USD 20 million, it’s good for the ecosystem.”

No definite date was provided for the size limit increase, though bigger games are expected soon.

Long in development title Castle Crashers has finally gone gold according to this post on the company’s blog. The game has completed production and is currently awaiting certification at Microsoft.

In development since 2006, the hack-and-slash title for the Xbox Live Arcade still does not have a release date seeing how unpredictably time consuming the certification process is at Microsoft. However, with core development completed, the game will surely come out this Summer.

The third bomb pack for Bomberman Live is now available for purchase on Xbox Live. It adds more than a dozen new features, including ten new characters, two additional levels, two new leaderboards and a brand new game mode. The add-on costs 250 Microsoft points.

Today sees the release of two new games on Xbox Live Arcade - Arkadian Warriors and GripShift. Here’s the deal:

Three heroic shape-shifting warriors fight to release the Land of Arkadia from the evil Gorgon’s stony gaze. In the uniquely expansive “Arkadian Warriors,” randomly generated dungeons and cooperative multiplayer hack & slash action enhances a deep single-player campaign. The robust cooperative multiplayer mode is available for two players both locally and over Xbox LIVE. Upgrading is key as players hone their skills, acquire loot and master powerful magic spells and numerous deadly weapons in a journey of mythical proportions. “Arkadian Warriors” will be available worldwide for 800 Microsoft Points and is rated E10+ by the ESRB.

Through a mix of sky-high platforming and stunt driving, “GripShift” combines automotive and puzzle solving skills across 120 challenging levels, 25 rubber burning race tracks and 20 deadly deathmatch arenas across four themed worlds. Zoom to victory with four players over Xbox LIVE or race solo, all while enjoying a customizable music experience! Choose your driver, unlock faster vehicles and customize your ride with new skins. Developed by Sidhe Interactive, “GripShift” is a gravity-defying thrill ride every racing fan must experience! The game will be available worldwide for 800 Microsoft Points and is rated E10+ by the ESRB.

The games are being sold for 800 Microsoft points each.

Reflexive Entertainment, the developers of the award-winning Wik: Fable of Souls game, has partnered with The Axiom Corporation to create Axiom Overdrive, a new Xbox Live Arcade title. Here’s the scoop:

With the mine in full production, The Axiom Corp. mining company is now preparing for a massive hiring program of O.T.F. pilots. Pilots in the employ of The Axiom Corporation immerse themselves in the kinetic world of the mining colony AF128. Inside the mine, pilots discover side-scrolling, omni-directional, 3D, physics-based job challenges that will push their piloting skills while dazzling their eyes.

The Axiom Corporation, in conjunction with Reflexive Entertainment, Inc., is known for it’s innovation, and the mining colony on AF128 has been created to showcase our latest technological advances. We look forward to unveiling more information to the known universe about our mining colony on AF128, and our O.T.F. pilot employment program, in the near future.

The official website carries first screenshots and details from the game. No release date has been offered yet.

Mad Catz Europe has announced a price readjustment for the Xbox 360 Live Arcade GameStick, offering an impressive 50% discount for those who buy it this holiday season. The Arcade GameStick, offering ‘arcade style’ controls for the console, will now retail for £24.99, half of what it sold for before.

The arcade controller is officially licensed by Microsoft and features a full-size joystick and the unique 360° ‘Spinner Control’. It also comes with three full Xbox Live Arcade games in the box - Frogger, Timepilot and Astropop.

THQ has announced that it will release exclusively developed titles on Xbox Live Arcade starting with Spongebob Squarepants: Underpants Slam, an action game based on the popular Nickelodeon cartoon. It is expected to be released sometime next month. The game will be followed by Screwjumper, an original title, and Elements of Destruction and Rocket Riot.

Microsoft has finally come out of the closet and announced Xbox 360 Arcade, a cheaper model of the Xbox 360. Aimed at families this coming Holiday season, the Arcade model will retail for $279/£199 that includes a 256MB memory card and a wireless controller as well as a disc containing full versions of the five following Xbox Live Arcade titles: Pac-Man, Uno, Luxor 2, Boom Boom Rocket and Feeding Frenzy.

The new model is already available in North America. It will hit UK stores this Friday, October 26.

A second batch of gamerpics for Bomberman Live will be released later today on Xbox Live. Those interested can click here for a preview.

This Wednesday marks the release of two new Xbox Live Arcade games on the service - Battlestar Galactica and Exit. Here’s the deal:

“Battlestar Galactica,” developed by Australian-based Auran Games, involves intense space battles as players choose to side with either the Humans or Cylon forces. Piloting iconic ships from the Viper II to the Heavy Raider, players lead a squadron through fast-action multiplayer space combat or can play through the intense single-player campaign based on memorable episodes from the TV series, including the riveting first episode of the continuing series, “33,” and the 2007 Emmy Award-winning episode, “Exodus.” “Battlestar Galactica” features both single and multi-player modes for up to eight players, skill-based matchmaking and leaderboards.

A uniquely stylish and addictive puzzle game, “Exit” will have players using their decision-making skills and quick wit to escape numerous obstacles while rescuing people from more emergencies in over 220 levels. Developed by Taito, “Exit” stars Mr. ESC, the escape artist who goes wherever he’s needed to get people out of the worst predicaments you’ve ever seen. When it comes to escape, nothing’s impossible for Mr. ESC.

The games will be available for 800 Microsoft points each.

The classic combat sports game Speedball II: Brutal Deluxe will be available on the Xbox 360 via Xbox Live Arcade starting October 17, according to a recent announcement by Empire Interactive. A remake of the Bitmap Brothers classic, the game will feature the content as the retro version, but will also include the addition of more teams, downloadable content and high-definition resolution.

It will be available for 400 points.

Trippy shooter Gridrunner++ is headed to Xbox Live, as revealed by Jeff Minter, the psychedelic game’s creator, on his Livejournal blog. Already available on PC and Mac, with demos available from the Llamasoft website, the game is a traditional top-down shooter injected with flying sheep and weird stage names, among other things.

“I already have it running modified for the different aspect ratio and working off the x360 pad as opposed to the mouse, and I’m changing and extending the gameplay; it’ll be a much more involved game than the PC-only predecessor,” he wrote on his blog. “I’m getting all the gameplay working first then I’ll overhaul the graphics; we’ll likely go for algorithm generated 3D shapes rather than the hand-drawn sprites of the PC original.”

One of the world’s oldest and popular puzzles games of all time - Tetris - will be hitting Xbox Live Arcade today in the form of Tetris Splash. The game has undergone an aquatic treatment and will feature online multiplayer for up to six players, as well as act as a virtual fish tank, among other things.

Last week saw a pre-Tokyo Game Show briefing from Microsoft, where the company revealed several new Japanese titles in development. These games are set to hit Xbox Live Arcade in the coming months.

First up is Rez, a trippy on-rails-shooter from Tetsuya Mizuguchi who is personally involved in the development of this downloadable title. Q Entertainment bills the game as a “direct port” of the original enhanced by high-resolution assets and 5.1 sound. The game is set for release during Q1 2008.

Another shooter - Ikaruga - will be available soon. This vertically-scrolling 2D shooter will feature the standard two-player cooperative mode of the original. It has been listed as “available soon,” so no release date yet.

Other games announced were Every Extend Extra Extreme, Exelica, Omega Five and EXIT, which was originally a PSP puzzle-scroller.