Kind of a low-brow game idea this one, but it's for the kids and kind of suits the festive season anyway. At least it does if you eat as much sugary stuff as I do over Christmas.
The game is set in one of these worlds that is brought into existence from the shared imaginative power of kids the world over, sort of like Santa's workshop. However, it has long been out of the hands of its childlike progenitors, either because the kids have forgotten it or have grown up to become moody adults with issues and the like. As a result, the Candyworld has become sort of a dark and violent place, but still with all the coma-inducing sweetness in every corner of the land and its inhabitants. Currently, the various tribes of the world (which are typified by the type of candy those tribes are comprised of) are in the midst of a bloody and endless war for supremacy.
You are a member of a new tribe that has shown up because of a candy-based innovation in the real world. As such, you not only have to survive with the limited support of your fledling tribe, but also grow powerful enough to take over the other tribes too. Fortunately, as the newest and therefore most technologically advanced form of candy matter, you have an advantage over most of the other tribes, which feature--but aren't limited to--beings made out of marshmallows, chocolates, lollipops, boiled/hard sweets and the always terrifying fudge tribe. The player's tribe I haven't decided on yet, but I'm thinking it'll be some kind of space-age candy that is able to take on the attributes of any other candy, to create some sort of power-acquisition-based progression in the game (taking over one tribe's territory allows you to use their strengths, for instance).
The game itself is a third-person squad-based shooter, though I've yet to decide on an "over-the-shoulder" view system of many recent squad-based games, or the slightly more convenient bird's eye view. The world itself will be a little like Crackdown or GTA, in that the politics of the world is dynamic with the NPC tribes scoring various victories and losses against each other in real-time - these battles, if you're not actually in the vicinity of them, will be calculated using randomized figures for casualties and who ends up getting more territory out of it. If you are close by, the battle will be going on all around you and you can use the warring (and therefore distracted) tribespeoples to your advantage. These tribal wars are mostly random, but constant, so you should find yourself entering several by accident. Of course, you'll also want to make an effort to join them as soon as one occurs if you want to take down the enemy's numbers quicker. There'll also be various attacks on your home base which you may want to be present for (though your tribe should be able to handle most minor skirmishes). You'll be given the choice of systematically destroying one tribe at a time, or using your intel to take down large numbers of opponents at the most opportune moments (the aforementioned tribe wars).
Ideally, you should want to find a way to acquire the abilities of one tribe and use them on another tribe that may be weak against them. Sort of like the Mega Man bosses. If you take out the Warheads (extremely hot-flavored candies) you can use their firebreath to melt the marshmallows and chocolate factions, who are considerably strong against other forms of damage. Because there's no blood (but lots of jelly filling), the game can be as gleefully violent as it wants. The cutscenes can be gritty as all hell (especially if they involve cotton candy) and the various deaths of the candy tribes can be pretty explicit, since it's just candy and all.
I will admit to two things while coming up with this idea. The first is that the general premise (violence in candyland) came about from this Perry Bible Fellowship comic (great comic series by the way, if you didn't already know). The second is that this is sort of an example of how to get incredibly violent games into the hands of youngsters without too much controversy. See, it'll be violent and bloody (well, jelly-y) but there won't be any swears or bad polygon boobs to make it unholy filth. Perfect.