You'll have a lot of delegations to deal with then. I would think it would be better to have a bigger delegation so that you don't have the same characters competing in all the events. Some delegations would be bigger than others, just like it is in the olympics.
You'll have a better medals competition then too with the bigger developers competing to see who can rack up more medals (nintendo, sqare, etc), which could feel more like the big countries competing broad scale.
It's certainly an ambitious project but could be really cool once the details were hashed out.
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Retaliation. Tit for tit.
-Dwight