According to a job listing on Microsoft’s website, MGS Mobile Games will work as a part of the already quite successful Microsoft Games Studios umbrella. From the posting:
Our vision is to deliver games and entertainment so good that people will want them always with them, on a service that makes them social, connected and relevant anywhere their life goes.
If there’s anything Microsoft could’ve done to strengthen WP7’s upcoming launch, it’s this. First-party games are almost certainly going to be integrated into the Xbox Live experience, which makes its smartphones the handsets of choice for gamers of the world.
I don’t want to beat around the bush: unless Microsoft releases some truly horrific launch titles, you can expect for this to push sales quite a bit. The Halo series and the Fable series, both of which are quite popular, are developed at Microsoft for the company’s gaming platforms, and there are quite a few people who bought Xbox consoles just to play Halo.