I\’ve been talking to a lot of companies in this space for the last few months and they all have different approaches the problem you are framing here. Some of the companies facilitate licensing and some license directly. Here are a few that I know fairly well:

http://www.ideatango.com
http://www.worldinnova.com
http://www.inventwise.com
http://www.fluidinnovation.com
http://www.virtualventure.com

1. What is Produced
    a. Currently, IP Holder Inc exerts a lot of control over the use of the property.
    b. With your way, IP Holder Inc doesn’t act as a gatekeeper for good ideas.

2. Who Participates
    a. Currently, IP Holder Inc finds (or is found by) a single UGC Service (i.e. a big publisher) for a specific project.
    b. With your way, IP Holder Inc allows anyone and everyone who agrees to the terms.

So clearly, your way means more content is put out there by more developers. But for it to work, IP Holder Inc must not overly screen ideas, and UGC Service Inc must find it relatively easy to qualify. Additionally, UGC Service Inc most likely has to find its own project funding.

But in present times, those aren’t very realistic expectations to have. I think you and Kim are right that it would have to come from brave 2nd-tier IP holders looking to differentiate, if at all. A typical IP holder interested in getting more use out of their IP would be more likely to expand and streamline the current model.

But the tail continues to grow longer and more people are taking notice, including big IP holders. I think your Web 2.0 IP Licensing concept will come about some day.

It’s a neat idea. YOu’ve seen MGS’ rules, right (see don’s blog at:
http://donkeyxote.spaces.live.com/blog/cns!239CCA3F6918F4C1!348.entry )

One challenge (rev share or no), is in the *explicit rules*. I think that some companies would want the rules deliberately vague for reasons of plausible deniability, which in terms means *come ask us and we will tell you if you are approved*.

For example, IIRC, George Lucas cracked down on gay Star wars fan fiction in the past. Openly stating *we won’t allow homosexual portrayal of our characters* would be a lightning rod of controversy. However, they could hide behind *we looked at your stuff and deemed it undesired*.

Another issue is that the major IP holders tend to undervalue games and overvalue their IP. the terms they expect are pretty outrageous at times.

As always, I am a beleiver in the power of free markets. I beleive that a solution like this could *and will* work, but it’ll come from someone with 2nd-tier IP looking to differentiate.

And by the way, this is true not only for games, but music, fan fiction, etc, etc.

To Don’s rules cited above, I think this is a rare example where a large company is leading the way. Pretty innovative of us! Go Microsoft!

It is certainly interesting to think about.