Microsoft is still primarily a software and services company, but it has been expanding its hardware efforts little by little for years now. It began with mice and keyboards, intensified with efforts like the original Xbox and the Zune, and has gotten much more serious in the last year with the introduction of the Surface and Surface Pro and the announcement of the Xbox One. Now, a report from Bloomberg says that Microsoft is taking things one step further: the company has designed its own motion sensor chip to go with the Xbox One's upgraded Kinect.

The report is light on technical details, but it does mention that the chip is being manufactured by Taiwan Semiconductor (TSMC)—which makes chips for AMD, Nvidia, Qualcomm, and many others—and that it is replacing the previous Kinect's PrimeSense-designed chip. As has already been reported, the new Kinect is a time-of-flight camera that detects motion by sending out light pulses and measuring how long it takes those pulses to hit objects, and the results are much more accurate than the old Kinect.

Microsoft's desire to design its own chips reaches back to 2006, when the New York Times reported that the company would be forming a "Computer Architecture Group." According to the Bloomberg report, that group now consists of about 200 people. At the time, the group was said to be focusing its efforts on a follow-up to the Xbox 360, which appears to be just what has happened here. Todd Holmdahl, a corporate vice president at the company, told Bloomberg that other units within Microsoft have expressed interest in the Xbox team's work and that Microsoft-designed chips could conceivably show up elsewhere in the company's hardware in the future.