Where is XNA headed?

I love XNA. I really do. As president of the Game Development Club at my school, we use it and I teach it. But I'm worried about it.

I've always wondered, are there any signs that XNA will ever become more than just a prototyping/arcade game language? I've always gotten the feeling that Microsoft is on the cusp of abandoning it, like they did Managed DirectX. The Xbox Live Arcade is an amazing idea but it's shoved off to the side, well overshadowed by the "real" Xbox games when I feel like it would've had so much more potential, had Microsoft given it more emphasis.

Now with XNA 4.0 CTP for Windows Phone 7 only, it seems to be morphing into some sort of phone-only thing. I'm really unsure about exactly why they are doing that.

What's the current state of XNA, and where is it headed? Is it going into mobile-only, or will 4.0 eventually be released for Xbox and desktop usage?

In other words, is it a language to invest time and money into, or should it be only tentatively developed on, with the constant fear of abandonment? And when I ask this, I'm talking about desktop and Xbox games, as I can pretty clearly see that it is the game framework of choice for the Windows Phone 7 platform.

Since this question is somewhat subjective (but I'm really looking for facts alongside your opinions!) I am making this a CW.

Answer

The feel i get from development of XNA is that they're eventually maneuvering it to be the replacement to Managed DirectX. As far as the phone features, that's simply because they're rigging XNA to support Windows Phone 7 (or whatever it's called). They did a similar thing with 3.0 (or was it 3.1?) and the Zune/Zune HD. Overall, i think these mobile devices are just temporary features of the platform and will fade away at some point, while they continue to improve the core of XNA.

Additional evidence is that XNA is being used more to develop high quality works (such as Sol Survivor).