An admirable piece, as it was when it was written in 2007, but it's worth noting that in part a verdict has already been passed on the idea; Manifesto Games, which it touts as its success story, was shut down in June of this year because it wasn't profitable.
See "Shuttering Manifesto", here: http://www.manifestogames.com/node/5151
Excerpt: "...Clearly, we haven't succeeded in realizing that vision. There are a host of possible reasons why; perhaps we launched with an excess of naïve optimism, through of course a surfeit of optimism is an entrepreneurial necessity. We did not achieve the critical mass of support by independent developers that we had initially envisioned (some of whom, bizarrely, viewed us as a competitor), though we appreciate the strong and enduring support we received from some. We always knew that the essential problem we were trying to solve was a marketing one, but we never figured out how to crack the marketing nut, at least with the minimal financial resources we had available. We failed to raise substantial venture money, despite engaging with many VCs over time. And of course, the recession doesn't help."
