Microsoft is believed to have added id8 R2 Studios, a home automation company, to its Xbox division.
The Wall Street Journal cites anonymous sources for word that Microsoft has acquired the "small home-entertainment technology start up" - and any and all of its patents related to "controlling electronic devices".
R2 Studios is said to be in the business of "distributing and displaying digital media on TVs", and apparently negotiated with Google and Apple before signing with Microsoft.
Presumably Microsoft will use the company's technology or expertise to help ramp up its entertainment offering on Xbox, and perhaps to use its patents with its SmartGlass system, which allows users to control their console using a smartphone or tablet.
Although no financial terms were revealed, R2 Studios founder Blake Krikorian is said to be bringing a small team to Microsoft as part of the deal.