Krome Studios are behind the virtual Game Room, and they say it could be "like having iTunes" but just a "different version" on Xbox Live.
"I think the thing is that you've got a whole range of stuff that people can't get any more," said Krome's creative director Steve Stamatiadis, reports .
"It's a way of getting these arcade games legally and authentically - that's a big plus. It's like having iTunes - you've got music that you can't find albums for, but you can now go and buy it. This is just a different version of that for games."
Xbox Live avatars will be rubbing elbows with fellow arcade enthusiasts when the Game Room service launches, and are able to buy retro arcade units while socialising. Stamatiadis says he has "no idea how far" Microsoft plans on taking it.
"But on the arcade front you have a lot of games that you can have in your arcade room that you may have seen once or twice, or you may never have seen in an arcade - there's a compilation," continued the Krome Studios boss.
"And I know Microsoft is going out there just talking to everyone. They're looking at lots of different classic games. It's going to be a big library when it's finished that's for sure. I know they're saying over a thousand, but I'm sure that's conservative."
Well it's better than letting those retro classic arcade gems simply rot and be forgotten - Microsoft could actually help whole new generations get in touch with what made videogames they are today, which isn't such a bad thing is it?
Is there a particular arcade unit of yesteryear you couldn't resist firing up again?