Microsoft just showed us a pair of 3D games running on its ASUS Windows Phone prototype and built with its brand new XNA Game Studio 4.0 9 http://www.engadget.com/2010/03/09/microsofts-bringing-xna-game-studio-4-0-to-gdc-this-week-does/ ).
The two titles are The Harvest (pictured), a good looking touch-controlled dungeon crawler with destructible environments, being developed by Luma Arcade; and Battle Punks.
Microsoft spoke to the ease of its Direct3D development platform, which was built by the same folks responsible for the first-gen Xbox. What we saw of The Harvest was built in "two or three weeks," mostly from scratch, and folks who've already built games for XNA in VisualStudio shouldn't have much trouble with a port from the sound of things: "very, very easy," said Microsoft. Right now developers can do their testing in Windows, but there should be a Windows Phone 7 Series emulator out for devs eventually.
Engadget : http://www.engadget.com/2010/03/09/microsoft-shows-off-xna-games-running-on-windows-phone-full-3d/
Video: Cross platform VisualStudio gaming: http://www.viddler.com/explore/engadget/videos/1186/101.97