Microsoft uses Scaleform and Flash for mini and micro games such as Fable II Pub Games on Xbox Live Arcade. Flash is mostly used for menus, mini games, in-game interactive objects with animated Flash controls and video, and in-game Heads Up Displays (HUDs). The term Heads Up Display comes from the fact that users don't need to divert their attention away from the main interface while playing; they're often displayed at reduced opacity and give details on lives or power left to the user.
Flash skills have never been so marketable. Console games user interface design is a huge growth area crying out for Flash designers and developers. With advances in middleware technology, control of console interfaces has been placed well and truly in creative hands.