SAN FRANCISCO — Games became bigger than music last year, Microsoft exec John Schappert proclaimed as part of his keynote address Wednesday to kick off the Game Developers Conference 2008, adding that every monetary measure attests to that fact.

And with that bold statement out of the way, Schappert (the corporate vice president of Xbox Live) and a variety of developers argued that the Xbox 360 could make a good run at YouTube, not just with the likes of "Gears of War 2" — which was not quite properly announced during the keynote — but with a suite of new Xbox 360 functions that are designed to enable the (almost) average person to upload games to the 360 for friends to rate and play.

The YouTube target was made clear throughout the presentation. Shappert claimed that in any given day there are 30 percent more pieces of user-captured content uploaded from "Halo 3" to that game's official site than there are new videos on YouTube. And the flow works the other way too: In an Xbox 360 developer's reel, MTV's Harmonix revealed that consumers had already purchased more than 3 million downloadable songs for "Rock Band."

Microsoft's more interesting — and most YouTube-esque — reveal of the keynote came at the start. Chris Satchell, the company's head of XNA game-development tools, said Microsoft was ready to embrace indie games. XNA is a free toolset for garage developers that has been available for more than a year but hasn't supported an easy way to get playable games to the public. Enter Community Games, a new feature for their Xbox Live online service that makes games produced with the indie-focused toolset available for download to the more than 10 million Xbox 360 owners.

Naturally, one would wonder how Microsoft intends to open the floodgates without the 15-year-old boys of the world immediately taking advantage of the newfound openness. Satchell claimed the company would not even be involved in that process, instead relying on democracy and self-management. When a game is uploaded, an unspecified number of users need to "approve" the content before it's released. If the content is deemed inappropriate, Microsoft has the option of preventing its release. If it passes muster, anyone with an Internet-connected 360 can get the games.

Community Games hasn't yet been activated — expect that in a dashboard update soon — but Microsoft has uploaded a number of XNA-developed indie titles to Xbox Live that can be downloaded right now, including Ska Studios' "The Dishwasher: Dead Samurai," a violent side-scroller designed and coded entirely by one guy. Other Community Games shown include the Jello-meets-driving game "JellyCar" and a game that involves an inebriated cartoon hero shooting zombies with shotguns.

The Microsoft executives also announced that XNA-made games can now be ported to the company's answer to the iPod, the Zune. With the MP3 player, Microsoft is also invested in the music business: Can games and music work together? Definitely, said Microsoft. The company is taking aim at Apple's expanding iPod-games business by introducing games for Zune, but these aren't just ports of "Tony Hawk's Pro Skater." Rather, Microsoft wants to cultivate wholly original creations, designed using XNA, from one or two minds in a garage (or dorm room).

Despite the company's big announcements, some of the thunder had been stolen from the keynote. By the time Shappert, whose first foray into games was working on the Electronic Arts classic "Desert Strike," took the stage Wednesday morning, his biggest secret had already been spoiled, thanks to a leak in Europe: "Gears of War 2" is coming from Epic Games, and it's coming this year exclusively for Xbox 360.

Unfortunately, that's everything that was said about "Gears of War 2" at the keynote. The all-too-brief teaser trailer was extremely stylized but featured no gameplay. That was apparently deliberate, as lead designer Cliff "CliffyB" Bleszinski quickly blazed onto the stage, a prop version of the "Gears of War" trademark chainsaw gun in hand, and assured the audience it wouldn't be long before they'd see more of Marcus Fenix: The game will be released in November.

A few minutes before the trailer, Epic Games revealed a variety of new technologies — basically, ways to make games look better — for their Unreal Engine 3 middleware (software applications that work on different operating systems), shown within the "Gears of War" universe. The segments included a scene of 100 enemies rushing down a street, realistic-looking water and a big block of meat that wobbled and came apart as Fenix shot at it. Looking back, maybe Epic tricked everyone in attendance and gave them more sneak peeks of "Gears of War 2" than they realized.

That wasn't the only game in the spotlight; Tecmo's Tomonobu Itagaki and Lionhead Studios' Peter Molyneux appeared onstage separately to show the latest versions of "Ninja Gaiden II" (coming in early June) and "Fable 2" (coming sometime in the fall), respectively.

MTV News spoke with both Itagaki and Molyneux in San Francisco; check in at Multiplayer.MTV for continuing coverage of GDC 2008.