The new location will centre around the development of its "long-term business with Entertainment as a Service at its core," but Microsoft would not comment on whether it was Xbox 720 related.
A statement from Microsoft said the unnamed studio would "focus on Windows 8 tablet devices as the underlying technology and platforms as part of Microsoft Studios' continued expansion across the region."
Incredible roster of talent
The studio will begin work in November and is currently recruiting. It will be led by the former production director of the Rare gaming studio Lee Schuneman.
His resume includes work on Kinect Sports 1 and 2, Xbox 360 Avatars and Fable: The Journey.
"Adding a fourth UK-based studio to the incredible roster of talent already in place across Rare Ltd, Soho Productions and Lionhead not only increases our in-region studio presence, but will allow Microsoft Studios to explore the many creative and business opportunities that developing new games and entertainment experiences on Windows 8 tablet devices and platforms will afford," said Schuneman.
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A technology journalist, writer and videographer of many magazines and websites including T3, Gadget Magazine and TechRadar.com. He specializes in applications for smartphones, tablets and handheld devices, with bylines also at The Guardian, WIRED, Trusted Reviews and Wareable. Chris is also the podcast host for The Liverpool Way. As well as tech and football, Chris is a pop-punk fan and enjoys the art of wrasslin'.