In general, I think this is a good idea and could tie in nicely with AIP-209: Ape Accelerator powered by ApeCoin) as well as the AIP-245: Working Group Charter - Metaverse.
There are a few challenges I think are worth highlightin:
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$5M to $20M will be tough to get approved. I would start with a smaller ask, e.g. $500K to $1M for some kind of a proof of concept. Maybe during this phase you recruit let’s say 5-10 game studios to build various PoCs, collect some data, and then for the most promising concepts you go back to the DAO and say “I need a larger amount now to build these X concepts that showed the most promise into full blown games”
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Otherside is not live yet - it’s expected to make it debut by end of year. I would imagine the ODK is something similar to UEFN, and from what Herman Narula told us the M2 platform will open its doors by end of summer, so that could be a good place to start. It sounds like they’re going to open a Discord and will give devs access to an M2 sandbox where you can deploy MML and use their World Builder to build various experiences/games. This is where your target game studios that you want to onboard onto your publishing platform could start getting their feet wet in anticipation for Otherside’s launch.
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You might need Yuga’s support - the big unknown is how much resources it will take to manufacture all the various in-game objects & avatars. The way Otherside designed their game, you need to use in-game resources in order to make any object playable. Without knowing the resource mechanics, it will be difficult to predict which resources you’ll need to make your game playable and how much it will cost, game devs might have to purchase a lot of Otherdeeds. I believe Yuga will give resource grants to early developers to help offset these costs and onboard players, but it hasn’t been made public yet, hence why I think having Yuga’s support will be critical.