User contributed content

I think it's definitely worth it. I wouldn't spend an inordinate amount of time creating an amazing in-game interface for content creation. Just design the game with user content in mind, and create documentation, guidelines, and requirements for content. A good set of specs and/or some basic tools will allow enable the passionate users to create what they want without putting a significant burden on the development team.

If you just mean make your game moddable, then yes, you definitely should try to.

If you mean you're actually trying to make an MMO, and you want to somehow let people upload their content, or you mean that you want to sell some single-player game but first get free work from the community, then things are a bit hazier. You can NOT just take people's mods and sell parts of them, even if you're the original developer, and getting their permission is more than just sending them an email asking if it's ok. I would suggest you get a lawyer and have a very thorough content license, and you will might need to have everyone legally sign a transfer of copyright, non-disclosure, non-compete, and documents saying they take full legal responsibility for any infractions in their own artwork (if they have pirated 3DSMAX or are basing work off of someone else's art). There's a reason no companies ever do this; it's because it's usually cheaper and easier to just hire a few artists than to try and sort out the legal and technical mess of "free" artwork from a bunch of random people you've never met.

As makeshiftwings said, I think that it might not be worth it for some situations. Believe me, it is already hard to administrate a bulletin board, so a game on which you do not know and don't permanently see all the members is a huge mess, and I think you'll spend more time sorting this than create new content. However, in the case of an MMORPG (and I know that one commercial game did this, I can't remember the title), you have different levels of customization you will want to allow:
— Low level: the players can write and publish stories but they won't have any impact on the game, create new weapon skins, etc. I am not too ok with it because it's easy to have d*ck-looing staffs, ridiculously impressive low-level weapons, etc. Even if you decline any responsability for inappropriate content (which I guess you cannot do to any extent), your game can lose a LOT of its immersion ability.
— Medium level: start player quest (write a little text, setting a completion condition and a reward, etc.). When the player quest panel is popped up, you should mention that it is not a regular game quest and that you are not responsible for anything the quest can lead you to do, it's completion guarrantees, or the text being shocking, etc (which should not stop you from punish people writing insults whatsoever).
— High level: the player can build their own quest series (using NPCs), but you'll want to make sure they can not cheat and get easy rewards from it. For example: "Kill one rabbit". "Reward: The Legendary Cursed Axe of Gorkhal-Moon". The rules of editing quest should be very restrictive if you do not want to have to sort out reliable players to give them those powers. At any rate, giving such content-creation abilities to players is a very hazardous choice, especially if you do not plan to supervise anything.

And of course, make sure you have people a contract and NDA signed before you sell any of their work.

The approach I am taking with Odyssey is to make a request/offer system of resource identifiers, as well as implementing a series-based package system.

The request/offer system requires users who wish their packages to be guaranteed to be unique and not have some of the media overwritten by other package authors, to submit a request to the administration (i.e. me), where I maintain a list of all official packages. When a request is received, I supply the requester with a media series range (based on their requirements) they can use in their packages.

Media in packages are series-based (as in, series of sequential numbers) such that that resource IDs used for each type of media (sprites, sounds, etc) are unique and won't conflict with "officially sanctioned" packages donated by other parties.

Simple theory, probably difficult to implement (it's sitting at about "half-done"). But I think in the long run it will benefit the community I'm trying to build.

Thank you all for the ideas and insights.

The game is MMO, so the "moddable" idea is only partially applicable, but I'm still bouncing ideas, so there might be something to that at some point. What I get from this is that if a user draws his own custom set of icons, the requirements would be different than if I want to use a user-written quest. In the latter case, I'd really need an NDA and release of copyright, because others would be playing that, and I would benefit from that (with ad revenue, for instance). For the former, icons that would only be used by the player him/herself, would I need that? I'm thinking that these would be similar to avatars used on a forum. The revenue generated by others seeing ads while viewing your av would be similar, and inconsequential. I'll have to hire an attorney to sort this out, probably, if we go that route.

Yes, I'd say you should definitely check with a real lawyer, one who is familiar with digital copyright laws. I don't really know all the details; I only know that it's a lot more complicated than it might seem.

But I do know that if you have an MMO, and you let the user mod his own client (like making his own icons that never get uploaded to your servers), then you're usually fine. As long as you don't incorporate a user mod into your official game, and you don't officially host user mods on your own server, you usually avoid any legal responsibility for any of it. But as soon as you incorporate or distribute their stuff under your own company's name, you become liable for it, and can get in trouble if any of the player mods are illegal in any way (like using copyrighted art, being pornographic, or being made with pirated software).