Microsoft has bought promising startup R2 Studios, which has previously worked on media-streaming and space-age home automation technology.
The freshly-inked deal will see R2 Studios' patents put to work in Microsoft's Xbox division, Wall Street Journal reports.
Microsoft did not disclose how much it paid for R2 Studios, although the report states that technology rivals Google and Apple were also courting the company.
Less than two years old, R2 Studios is headed up by Blake Krikorian, creator of TV-streaming service Slingbox. The business had been working on top-secret technology for displaying digital media on TVs.
It had also previously dabbled in futuristic home automation, and released an Android app that let users remotely control their home's heating and lighting.
Could R2 Studio's technology be used in the next Xbox powered by Kinect 2? Microsoft is expected to announce details of its new console this year, with a release expected in time for 2013's busy holiday season.