XBLA is one of the most integral portions of the 360 for MS.
In fact, the industry is starting to pay A LOT attention to these new revenue streams, because for them, in many cases, it is equivalent to found money.
They know they arenít cannibalizing on their mainstream business, but at the same time, they're able to nickel and dime a little extra from the hardcore gamer in many cases, and in other cases, they are attracting a fresh demographic, the "up-until-now" disinterested gamer.
I was at e3 this year and there were more than one workshop about attacking the "casual games" market. "Sieze the minute".
Look for it to expand heavily in the next 3-5 years. Considerably.
Just my 2c