There have been some games similar to this in the past, and right now there's one selling on Steam called 'Game Dev Tycoon'. The original one I recall was called 'Software Star' on the ZX Spectrum.
I'm putting together something similar but I'm stuck on the most critical aspect of the game, and that's how to make the game development part both fun and relevant to the player's decisions. In SS, it's basically just a case of, the more time the player spends working on the game, the better the final product. It's not very much fun or challenging. GDT is a bit better, with levels for the player's skills in various departments, which is quite good, and a few nice little elements, but it's still not what I'm looking for. I do like the idea of player-skill levels, but what I also want to mix in, is the ability to 'research' levels by playing games (within the game) and reading books about programming (within the game).
What I can't work out, is how to make this fun in a game. I'm usually quite good with this sort of thing, but for some reason, I can't think of how to mix this together to make a fun game, about making games. Does anybody have any ideas, or have they played anything similar that might give me ideas? I suppose in some ways, it could be similar to construction style games, except here you're constructing a game instead of a building/country/whatever.