The rumours started when Microsoft bought the network equipment of one of the biggest names in the gaming industry.
Sources close to Microsoft say it is in the process of finalising a deal to acquire Microsoft’s network equipment for use in the Xbox One console.
This would be a major move as it would mean Microsoft will be able to leverage its own infrastructure to offer a wider range of online services and games.
It is understood that Microsoft has been talking to major networks such as Sky, BT, Virgin Media and others about the acquisition.
The network equipment would be used by Microsoft’s servers to store and process video, audio and data.