Though definitely a tad simple for those itching to build a Halo-wannabe or a Command and Conquer-esque derivative, it has already proved to be a success in testing both in marketing terms as well as a learning tool. Children will be able to design simple games using a pre-made set of characters and objects and then implement those into worlds they create from templates or completely from scratch.
This game is supposedly based off of learning rather than entertainment, but will prove that learning can be entertaining if it is a widespread success at its release. Microsoft Research began two years ago testing Kudo with the non-profit organizations Girls, Inc. and the University of Santa Barbara "to see how the Kodu program helped youngsters progress in science, math, logic and problem solving," and the children who used it loved the creative freedom that they were empowered with to create their own games.
It is hoped that parents will join in the fun with their children "and actually engage in this simple programming model that is fun, in and of itself," and create something "a little bit magical."
Kudo is slated for a Spring of 2009 release, but pricing is still unknown.
I wish I had something like this when I was a kid. I remember my buddy had something similar to this on the Super Nintendo that enabled one to create his or her own RPG using predefined characters and tilesets-- a sort of RPG Maker for the console back when it was unavailable (rather unknown to us youngsters) for use on the computer. All in all, I believe it's a good move on Microsoft's part to create a game for children that will promote learning and creative expression more than most other video games in history, and if they make money off it (as is Microsoft's trend), so be it.