i am not sure if they already do a surgery like this. i was thinking it could sort of be like a minimal scarring method for guys with bigger chests.

this picture might be nsfw!
http://i1340.photobucket.com/albums/o725/pictusandstuff/d_zps07270615.png

the picture on the left is the drawing of the body. the picture on the right is a diagram showing where the skin should be cut and stitched up. the red lines are where the cuts should be. so if you can imagine, the piece of cut out skin would look like a donut. then the blue lines are showing that you pull the rest of the skin towards the areola to get stitched up. and then you can get your nipples re-sized as well.

if they already do the surgery like this, does it work? would it work? it might just be one of things things where it only works in your head.

I dunno, just looking at that it seems like you'd be taking a lot of skin which probably isn't going to help the healing processes much.  And as it's being cut all the way around it's going to be tight and stretching from all angles which I would imagine would be painful everywhere and increase the risk of it not closing up tightly and neatly.  At least with double incision there's just the line at the bottom which is being cut open... just seems painful and tight to me.

They already do that, but it has it's limits since there would be pleating.

That looks like purse string, which takes more skin than key hole or peri but I wouldn't go for it because there's too much risk for pleating in the skin.