In response to the rising costs of development for games and decreasing numbers of studios willing to risk said money on new ideas, Microsoft is looking to provide tools for smaller teams and even individual hobbyists to create their own games. They've recently announced the XNA Game Studio development platform, which will allow the creation of games on the 360 and the PC.

Anyone can freely download the toolset, available in beta form on August 30 and full form by the end of the year. The toolset comes in two flavors: the entry-level XNA Game Studio Express and the advanced XNA Game Studio Professional. Developing games using Express and releasing them on the PC will be free, but those who want their games available for download on the Xbox 360 must pay $99 a year as part of Microsoft's Creators Club.

In spring 2007, Microsoft will release the professional version, the only way to sell games created using the toolset. The pro version will feature "new capabilities more geared toward professional game developers" and a higher price, said Scott Henson, the director of platform strategy at the Microsoft Game Developer Group. Henson declined to reveal the amount. All the various methods of selling games--digital distribution, Xbox Live Marketplace, and boxed retail games--will probably be available to game makers, but the details haven't been decided, he said.

Refering to games like Doom and Counter-Strike, Microsoft Game Developer Group's Scott Henson pointed out that some of the best and most revolutionary titles come from who "were hobbyists at some point." He says his hope is to eventually see a game "as fully realized as, maybe, Halo 2" made with the toolkit. He admits that he doesn't know if that day will ever come, but that it's possible with the technology being made available.

This is a great idea that may inject some much needed life in the smaller, non-blockbuster side of game development, but it's not without its pitfalls. As 1up mentions:

Who will own the software? If one considers how rigid Microsoft's certification process is right now for Live, how will it change when users are uploading games to that space? What about viruses and potential hacks? What if another platform holder likes what a user is creating on Xbox Live and decides they want to publish the game?

Right now, Microsoft doesn't have any answer to these questions; it's just too early.

This BBC article seems to suggest it's not too early at least for some of those answers, saying that:

Microsoft would regulate the content for appropriateness and intellectual property issues, but users would own their work, he said.

"I'd love to send a royalty cheque to a kid," he added.

The BBC article in general seems to paint a much less optimistic picture of the offering, saying the games will be "rudimentary" and basically makes it sound akiin to programming a Nibbles clone in Basic. But people have been known to do some pretty amazing things even with simple tools, and while they may not exactly be Halo 2, it'll still probably produce at least a few games that are better than some of what you'd see in retail.