MS has a "weaker" traditional 1st party effort than Sony and Nintendo, but that's been true for years. It's likely that everyone except 343 Industries, Turn 10, and Lionhead have been working on kinect and XBLA development.
The 360 is where it is today because of the 3rd party multiplatform support anyways, so maybe there's some surprises there. MS will be all about the Kinect this year though, no way around it.