During Microsoft's keynote speech at CES, a 12-year old girl named Sparrow created a virtual environment on the Xbox 360. It was the first public glimpse of Kodu, a new tool for building game worlds.
Nothing new about that you might think. LittleBigPlanet on the PlayStation 3 already offers sandbox world-building.
Watch the CES demo video and you'll see that Kodu is arguably more flexible. It's essentially an object orientated programming language that enables players to build virtual playgrounds and, ultimately, their own simple games.