how do you guys respond when someone with no game development experience attempts to begin a conversation topic like this?

I recommend that they consider a career in games, and I ask them to read FAQs on this question.

@ Swiftcoder (Quote is broken ATM) Almost everything has been packaged into development kits. All the dev team needs to do is supply a few custom scripts, add their own models and textures, and away they go with the "next big game" . Even the small teams that can not afford the "package" deals are benefiting from open source and/or cheap reusable code that exists all over the internet.

Kids do it. They ask; What do you do / What are you doing? And I tell them I'm working on a game. I've agreed a few times on sitting down with them to create something, but usually they get bored too fast. - Even when I pick easy stuff that's visually testable within half an hour.
With grown ups, it usually stays at the discussion stage. Other projects besides games come up quite often, and I keep stressing to them, that if I'm the only one contributing, I should be the only one given credit, -as they'd rarely have anything to contribute.
But people are different. Most know that an elder scrolls clone is not an overnight thing.

I feel pretty similar about this it's the idea of putting the majority of resources from time and thought of constructing the game to essentially designing the "game" portion of their idea not related to the hook . it just is a lot and in the end i will have contributed most of the resources but since they gave me the idea they will feel it was a 50/50 investment in the project from both of us .

I also agree with Kunos though at the end of the day it's pretty harmless and if nothing else it makes for interesting conversation for a little while as long as you make sure you express that actually developing the game is somewhere between unlikely to happen and..... not going to happen .if the project doesn't interest you at least!