Shares in Digital River Inc. have risen after rumors that the company was working with Apple on a solution for downloading games to the next generation of iPod.

Although neither Apple nor Digital River have commented on the rumors, which pushed the price of shares in Digital River up to over $40 at one point on Friday. According to the rumors, the two companies will work together to create a store allowing users of color iPods to buy and download games to their machines, with an announcement expected some time in the New Year.

If the rumors prove to be true, it would be a remarkable change of direction for Apple, which has so far resisted all attempts to turn the iPod into a platform open for third party developers.

Copyright © 2004 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in ExtremeiPod.