Highlights:

Game Developers Conference has been underway since Monday, but today's keynote from Microsoft Vice President for Live, John Schappert kicked off the show's PC and console side. More specifically, Schappert brought forth the company's strategy for cementing Xbox 360 and the Games for Windows platforms in the fiercely competitive games market.

Microsoft needs to protect its role as the leading platform of the current generation in the face of mounting momentum for PlayStation 3 and continued success of Wii. Xbox 360 has seen great reception from gamers, largely thanks to the slew of top titles hitting the system. Amazingly, Schappert announced that over a billion achievements have been unlocked by Xbox 360 gamers to date. The popularity of Xbox 360 is unquestionable, but keeping that is the challenge Microsoft faces.

According to Schappert, Xbox 360 will keep its position as the market leader because, “you simply can do more on our platform.” Xbox Live Community Games backs up that claim, bringing grassroots titles to Microsoft's online service. Different from the nostalgic titles and top tier titles release on Xbox Live Arcade, these are smaller titles developed by small groups or even a single developer. A trial of titles expected to launch with the full service is available right now on Xbox Live Marketplace.

Joining new community games to Microsoft's stable of games will be titles for Zune. The much-anticipated announcement outlined that the XNA development suite will begin supporting Zune so that developers can start crafting games for the touch-enabled handheld.

Footage of actual games was rather far and few between during the presentation, Ninja Gaiden II being the only full retail game shown for more than a few seconds. Producer Tomonobu Itagaki highlighted a previously unseen level of the Xbox 360-exclusive game entitled “Temple of Sacrifice.” The ability to record gameplay footage and the upload them to Xbox Live was announced—a feature likely inspired by Halo 3's multiplayer videos. Ninja Gaiden II is slated to ship in early June.

Fable 2 was also demonstrated by Peter Molyneux, although you can read all the juicy bits in our full preview of the game.

The big announce for the keynote was Gears of War 2, a project widely rumored to be in development. Given the rampant success of the original, it was only a matter of time before a sequel was green-lighted. What was surprising was Cliff Blezinski's promise to ship in November of this year. With eyes on Killzone 2 and Resistance 2—both of which are exclusive to PlayStation 3—it seems like the pressure is on for Blezinski and his team. No real details to speak of, but rest assured they'll come soon enough.