The original game files (in this case, I think .xma) are converted to FLAC and then MP3 files are generated from those FLAC files.
FLAC files are used to directly represent the quality of audio used in the game, in this case MP3s would have sufficed (because the audio quality used in the game isn't better than MP3s), but if I add just MP3s people complain that there is loss in quality and I should also add a FLAC version.