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Nilay, you should not rely upon the PS3 fans/360 haters for your information and writing incorrect posts. From the FAQ on http://forums.xna.com/ShowThread.aspx?PostID=46553
Q: Will this feature only work on newer Zune devices?
A: XNA Game Studio 3.0 currently will support Zune 4/8, Zune 30, and Zune 80 devices.
Notice the Zune 30. It is second gen firmware, but the first gen hardware will run the games.