The game has drawn numerous comparisons to Media Molecule's LittleBigPlanet (PS3) due to its reliance on users taking the initiative to create and share their own content. Along with creation tools, Kodu packs several pre-created levels and games.
A demonstration of Kodu during Microsoft's CES keynote presentation saw "actual 12-year-old girl" Sparrow take the stage to demonstrate the simplicity of its use.
"Since Kodu's interface is intuitive and prevents common programming mistakes, we're making it easy for everyone to enjoy the magic of game creation," explained lead designer Matt MacLaurin.
"We've done everything possible to make sure that creating a Kodu playground is not only easy, but that it is also fun and engaging for people of all ages and backgrounds."
"What I love about Kodu is that I can do everything myself," added Sparrow. "It's fast to build and different from the other games I play. I can do cool, silly things in it!"Kodu will be released as a download found in the Xbox 360's online Xbox Live Community Games Channel later this spring. No pricing details were provided.