From the Super Mario Wiki, the Mario encyclopedia
Stadium Blues (also referred to as Mario Episode 1 and Mario 1) is the first Mario episode in the Story Mode of the Nintendo 3DS version of Mario & Sonic at the London 2012 Olympic Games. The episode is unlocked after watching the Story Mode's opening, and unlocks the episode Foggy Foes upon its completion. This, along with Sonic Arrives, must be completed to earn the Story Mode 1 badge, and its completion is also required to unlock the Story Mode Cleared badge.
Mario and Luigi find Toad collapsed in the Main Stadium, which is filled with blue Phantasmal Fog. Toad wakes up and mistakes Mario for the Fog Imposter that scared him alongside one of Sonic the previous night, though Mario and Luigi explain they were not at the stadium the previous night. Toad questions the cause of the fog and decides that they'll have to cancel the opening ceremony, unless Mario and Luigi can figure out the cause of the fog. The three are then approached by Fog Imposters of Sonic and Tails, who attempt to stop them investigating and are challenged by Mario and Luigi to an Olympic Event.
Mario and Luigi manage to beat the Fog Imposters in the event, causing them to disappear. Omochao approaches Mario, Luigi and Toad, telling them that they had just beaten imposters, as he had seen them scaring people after they appeared the previous day. The four notice that the fog has lifted slightly now the imposters have been beaten, and decide to try and track down and defeat more to clear the fog. They set off in the direction of the thickest fog to try to find more Fog Imposters.