Microsoft recently released the beta of the Windows 7 development tools, and Silverlight is big part of that release. Silverlight can used in conjunction with the XNA framework which gives Windows 7 Mobile apps access to Xbox Live, among other features. As well, (and as it should be), Windows 7 Phone apps made with Silverlight can be sold in the Microsoft Mobile apps store. Here is a quote from silverlight.net:
"Developers build Silverlight applications and package them for submission to the Windows Phone Marketplace where users can download them to run on the phone on a trial or purchase basis. Silverlight for Windows Phone supports a built-in try/buy API to simplify the process of converting a trial to full version for both developer and end consumer."
This appears to open-up Silverlight game development to the Windows 7 phone in a major way. Yes, the audience is small, and yes, it is C#/Visual Studio Microsoft land, but it is also a market that will not be over-saturated with apps too quickly, and could be very lucrative if you get in on the ground-floor.
Check out the Wiondows 7 Phone development site here: