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MS Nerd was right, Finally after Xbox.com Update, Web games are now available which you can play for free if you have internet Connection and this gets Microsoft into Online Social games which is already pretty popular on Facebook followed by Google Plus games.
However the catch here is that not all the sections of the games you can play online is free, there are only few stages etc that can be played and for rest of things you need to buy them, download to PC and play it using the unpopular Microsoft games section on your windows which might start getting a breather soon.
What is interesting to notice that these games have advertisements right below the section where you play and you also get adverts before it starts loading.
Apart from this you have options to buy the game and download it to your PC, See who else is playing the same game and see their games. Once you have played a game, you will see related game the next time you play it again.