Call it a minor revolution: while Sony is desperately fighting a battle to keep players from building homebrew environments on their PSP, XBox is flying into the teeth of the dragon. They’ve announced today that they plan to ship a consumer version of the tools needed to make XBox 360 games.

“It’s our first step of creating a YouTube for video games,” Moore said, referring to the wildly popular free online video sharing Web site. “It will give you everything you need to bring your game to life on Xbox 360.”

GarageGames appears to be releasing their own stuff, which appears to be running concurrently with Microsoft’s own program.

This has the potential to be huge, folks. Any means of opening up the console to player creativity has the potential to create Internet-like memes. Depending on the power of the tools, XBox could well be the home of the next KittenWar or AmIHotOrNot.

The question now is how Sony will respond. If they don’t, it could be a knockout blow.