It certainly looks that way.
Here are the clues:
I am sure that we’ll see Microsoft continuing to supply Music and Video for sale through the regular Zune software, but the app market is clearly about to be killed off… unless, that is, Microsoft is just spending a little extra time before releasing a version of the XNA Game SDK 4.0 that supports Zune HD.
I think that’s pretty much unlikely.
So, if you’re buying a Zune HD today, Microsoft’s message appears to be that you are not going to get any apps other than the ones that are already available.
That seems rather disappointing – the Zune HD has touch, accelerometer and a graphics chip capable of some great 3D (check out the racing game, Project Gotham Racing Ferrari Edition for an example), but the current XNA Game SDK for it provides no hardware 3D support.