I got a chance to see first hand what the newly announced Zune gaming platform could look like. It's important to keep in mind that this announcement is still in the early stages of development, and we won't see any finished products, on the business or creative side, anytime soon. But this quick video walkthrough gives us an idea of what to expect in terms of development, API integration and wireless gaming.
Microsoft isn't trying to compete against the Sony and Nintendo with the Zune games. The demo they showed us, a Galaga style arcade game, was closer to an iPod game or a highly polished cellphone game. Games requiring the Zune Pad on 2nd Gen Zunes won't be able to work on Zune 1, and Microsoft is still working out how to approach this discrepancy between the two models.
Also touched on was the possiblilty or API integration, where stored media on the Zune could be used in games, and wireless gaming, opening the possibility for internet or ad-hoc connectivity. While no commercial distribution model is in place, the early SDK will be available to anyone with a XNA Creators Club membership and created games can be shared amongst members. [Zune Games on Giz]