It seems MS is focusing more on game development using .NET. The announcement of the XNA Framework at the GDC and this new area of their site:
http://g.msn.com/0AD0002U/887211.1??PID=3114334&UIT=A&TargetID=1063739&AN=304237415&PG=CMSAN1
Will the industry shift to .NET as a major language in game development? Hopefully, but I'm not expecting it soon. The (supposed) speed issue, (supposed) lack of penetration of .NET on client machines, etc. seem to be holding it back. If MS is going to focus on pimping .NET as a viable platform for game development it needs to address these issues. I'll be keeping an eye out on this issue, waiting for the day when I can get my .NET games on Live Arcade for the 360! :)