Xbox Live coming to a Nokia smartphone near you

Nokia is getting back into the gaming phone market, but don’t worry, it’s not resurrecting Ngage. Nokia and Microsoft have jointly announced that they “intend to” (applause from the legal department) enter into a “strategic alliance” in which Nokia smartphones will be powered by the Windows Phone OS.

Xbox Live will be included in the package along with the other Microsoft bells and whistles. Steve Ballmer, CEO of Microsoft, stated in a staged video clip: “In this partnership with Nokia, Microsoft brings its Windows Phone software and the brands that mobile consumers want, like Bing, Office and, of course, Xbox Live.”

Seems to be a win-win for Nokia and Microsoft, but both will face an uphill climb with Android and Apple’s iOS owning a large share of mobile gamers’ hearts and thumbs. This reveal also seems to be strategically timed. Sony Ericsson is set to unveil its PSPphone (dubbed Xperia Play) on Feb. 13.

No official release date for the Nokiasoft phones just yet, but we’ll be keeping an eye out.