This is pure genius on Microsoft's part. People will pay them to make games for them. Only IF the games are good will the creators make any money, whereas Microsoft has already made their pretty penny.
The other part of the genius is this: you will see games people want. Microsoft has had difficulty breaking into the Japan market. This is a perfect way to see what they want and really what we want as consumers. "hey, there are 1,000 fighting games being designed. Maybe we should make more too..." Game designers should see this as both good and bad. The good: people will be handing you fresh ideas to explore. It will guide the market so designers don't have to guess at what people want. The bad: if the average Joe can start making games just as good as theirs and at less cost, they will be scrambling to keep up with business. The overhead for gaming companies is more than a trifling few bucks.
This could be another swift kick to the Sony's collective balls.