American software giant Microsoft has reportedly acquired a small entertainment-based company, R2 studios, owned by id8 Group.
"Microsoft Corp. has acquired a small home-entertainment technology startup to beef up its Xbox unit", according to people familiar with the matter, reported Wall Street Journal.
Microsoft's rivals Google and Apple were also reported to be in the race for acquiring id8 Group's R2 Studios, but the Redmond-based company turned out to be the successful bidder.
The price of acquisition deal between Microsoft and R2 studio is still under wraps. Microsoft is also reported to have "acquired the some patents owned by the startup related to controlling electronic devices."
The entertainment R2 Studios has been working on technology related to distributing and displaying digital media on televisions, said WSJ. The company, id8 Group R2 Studios Inc. was created by Blake Krikorian in May 2011.
The report seemed to suggest that Microsoft is prepping to project its Xbox console not just as a gaming device but as a total home-entertainment system.
The Xbox business division has made deals with entertainment companies such as Netflix, Time Warner's HBO, Google's YouTube and other companies to offer Xbox users with live TV programs. Consumers can use Xbox Live premium subscription to watch on-demand programs and movies on their TV.
Apple has also introduced an Apple TV (set-top box) device which is connected to smart TV to stream movies and TV shows from the internet. Google TV is a television platform installed in televisions to enable them to stream live TV programs from the internet. Both technologies have the limitation of streaming only entertainment related videos and audio, but Microsoft's Xbox has the option of streaming live TV programs as well as playing games with people all around the world through the internet.
A couple of days back Sony was reported to have halted its PS2 production in Japan. This good news gives a perfect opportunity for Microsoft to introduce more features in to the current Xbox system to boost the sales and gain a strong foothold in the home-entertainment market.
With the deals made with R2 Studios and also with the entertainment companies, the software giant Microsoft is heading in the right direction of becoming the world's top home-entertainment company as well.
Speculations are rife that Microsoft is expected to launch the next generation gaming console Xbox-720 in the Christmas holiday season this year.