In the last two years and an half Running Pixel heavily invested time and resources on the development of Xbox Live indie games (XBLIG) and WP7. In this period we did six Xbox Live Indie Games making this distribution platform our main business and in the last moths we did 3 WP7 apps too. I can't honestly say this was a complete failure but I can't either say it was a success.
XBLIG is a strange world with its own market rules where sometime strange things happens and where good games fail and crappy one make good sales. (When I speak about good games I don't necessarily speak about my own games fyr.)
In this two years I saw heavy bugs affecting sales (the frozen top downloads list for example), a growing lack of interest of MS about their creature (XBLIG), internal fight to reach with unfair methods the top rated list, a very slow growing of the overall sales and some other disturbing things that made me loose my faith in XBLIG and in MS in general.
I think that 30 months are enough to judge a platform and my opinion is that it is a partial fail. I don't say there arent't good developers or good games because they are, but as someone else said xblig looks like a pit, once you're there you can't exit anymore, it is not a launch platform like someone (and me) could expect.
Now let's talk about WP7... well it's a great phone and I was one of the first Xblig developer making a conversion of one of its games for that phone (maybe the first) but in full honesty there are two major obstacles: the first is that there are still too few phones around and it is growing very slow (expecially compared with android or iOS) the second one is that the Xbox Live games are heavily promoted on the WP7, this put your not XBL game in an awkward position, and I have seen what this means with the XBLIG.
Six month ago in my mind the correct path would have been this -> first XBLIG and then WP7, but now I don't see this viable.
That said, I still love XNA and XBLIG but if me and my team still want to make games and live with them it's time to change platform and go for the huge markets and the freedom behind PC/Mac and Android or iOS phones and tablets. This means no more XNA coding and so it will be difficult to release WP7 and or XBLIG games because they would be threated as ports.
I'm excited about this fresh start and I can anticipate you the we're rapidly porting some unfinished but intriguing XNA projects into the new platforms to be released in a month or less. Stay tuned!