Quote Originally Posted by bipper View Post
Dream Cast did this. It flopped. Not to mention unless they are careful with licensing they will go the route atari did in 84.
I don't think this will 'flop', as it were. The Xbox Live Arcade on the 360 has generated a lot of 'indie' interest already, so making tools like this readily available to the masses could expand their appeal to independant developers immensely.

This kit will include 'how-to's and 'starter kits' so that the uninitiated can in fact do something with the system. I'm sure it'll still be pretty daunting, so that 12 year old kid who wants to make a side scrolling Naruto game will be SOL. If someone is really serious about making a game with this, the tools and instructions are all there to get you started.

Official and informative FAQ here.

About the licensing thing (which is vaguely alluded to with the Naruto game), i don't think a huge amount of these games will actually be published and sellable. There will likely be a strict set of conditions your game must meet (like licensing issues) before it is even considered to be a retail game. However, in the 'Creator's Club', you can trade and play other peoples' games.