Rumor is that Microsoft is planning to leverage the Xbox brand in order to build set-top box that will offer a low-cost alternative to its full gaming console.
According to The Verge, the set-top box "will run on the core components of Windows 8 and support casual gaming titles rather than full Xbox games typically found on a dedicated console."
In other words, it's an Xbox, but in name only.
Microsoft's Xbox brand remains relatively strong, with some 70 million Xbox 360 consoles sold since its release back in November 2005, and commanding the top spot in the console charts for months -- but it's by no means an outright success. Released only a year later, Sony sold a similar number of PlayStation 3 consoles, while Nintendo has managed to shift almost 100 million Wii consoles.
But compared to the almost 400 million iPhones and iPads in circulation, it's a mere drop in the ocean.
The living room is becoming the new battleground for technology companies. Microsoft, Google and Apple are all eyeing the space, but so far not making a huge amount of progress. The $99 Apple TV set-top box is, in Cupertino's own words, a "hobby project", and while Google is dabbling with smart TVs, set-top boxes, an alternative to Apple's AirPlay streaming standard, and a (now-defunct) Nexus Q streaming device, none of this has had the desired impact.
The living room is a tough market to break into, with even established players -- such as Sony -- hemorrhaging money. Kit that people hook up to their TVs remains no-where near as exciting as tablets and smartphones and e-readers, and as such these gadget manufacturers having a hard time gaining significant traction.
Microsoft is hoping that by combining gaming with home entertainment, and packaging this in a brand that people already know, that it might be in with a chance. It's certainly a novel idea, and depending on a number of factors -- namely the price -- it could be one that ultimately succeeds.
But, Apple and Google have invested heavily in this area and are unlikely to step aside as give up ground to Microsoft. Now that smartphones and tablets have become mainstream, the big players are looking for the next opportunity, and right now that opening seems to be focused around the television. This is where the next consumer electronic battle will be fought.
It's not the first time that there have been rumors that Microsoft was going to expand the Xbox brand. There's been talk of an Xbox tablet for some time now, although no hardware has yet materialized.