Bio: Manager and Principal of Fuzbi, a consulting firm focused on the business and design of online video games, and research affiliate of the MIT Comparative Media Studies Program.
How Much Money Can Your XBox360 Live Arcade Game Make? — uses publicly-available information to arrive at an estimate. I can’t comment on the accuracy (partially because I haven’t even started at XLA yet, so what do I know?) but the article seems reasonable. As Jeff notes, the numbers will change for the better as more 360s sell. Not sure I’d completely agree with his assumptions about inevitably skyrocketing dev budgets. Also, an interesting link to The Numbers Behind Live Arcade.