Microsoft announced yesterday that it is holding the first ever Xbox Live Arcade Awards this year. Beginning today and running through January 30th, gamers can vote on their favorites at http://www.xbox.com/xblaawards. The categories include the following, with the finalists chosen by a panel of consumer and video game industry journalists:

Below is the list of award categories that will be open for public voting:

• Best Overall Arcade Game
• Best Classic Game
• Best Original Game
• Best Family Friendly Game
• Best Competitive Multiplayer Game
• Best Cooperative Multiplayer Game

Other award categories include the following:

• Best selling game
• Most played game
• Highest rated game
• Staff choice

Winners of the XBLA awards will be announced at the Game Developer Conference next month.

Microsoft also took the opportunity to remind gamers that Undertow will be available this Wednesday (through 11:59pm on January 27th) for free, as a way for the company to make amends after persistent Xbox Live problems over the holiday season. What was not announced however is how the company plans to compensate those gamers that already own Undertow.  Sadly, this also means that there will be no new Xbox Live Arcade releases this week at all, which is less than ideal of course.