The company is currently applying for over eighty patents related to AR glasses, fuelling rumours that it's looking to create some sort of wearable Xbox One peripheral.
According to TechCrunch's report, Microsoft has coughed up as much as $150 million to buy the needed assets from wearable firm Osterhout Design Group - although it decided against snapping up the company entirely.
Kinect the dots
Back in 2012, an Xbox product roadmap leaked revealing some glasses described as "Kinect Shades."
Incidentally, the leaked files stated that the glasses SDK would be issued to developers by 2014. And would you look at the time!
Whispers of a Microsoft virtual reality device began again just after Sony revealed its own VR headset, Project Morpheus, at GDC 2014.
We're not saying Microsoft started the rumours itself - but if we were Redmond, we probably would have.
- Before we all get too excited about the future of virtual reality, how good is Project Morpheus anyway?