Microsoft will open a new London studio, which it says will focus on development for its Surface line of tablets.
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.