This almost looks like a case of a company competing with itself, but in the long run will probably be a wise move on Microsoft's part. Microsoft has indirectly announced plans to bring Xbox Live Games to both iOS and Android, instead of keeping it exclusive to Windows Phone 7. Apparently, there is a job posting with Microsoft that details these exact plans. The job posting says,
An unnamed developer for Microsoft commented on the subject,"As the team inside IEB (Interactive Entertainment Business) dedicated to mobile experiences, we work closely with console software team and Xbox LIVE services team to bring the latest and greatest gaming and entertainment experience to mobile platforms including Windows Phone, iOS and other mobile platforms."
Interestingly, for now, Microsoft still advertises the Windows Phone 7 platform as the only one where you can get Xbox Live service; however, if they don't move into the iOS and Android markets they would basically be conceding that ground to Sony's PSN Network in the future, which is an unlikely strategic mistake on their part."Xbox is a client of ours. There's no way they'll be ignoring those other mobile platforms."