Codenamed Arcadia, the streaming service is said to be built on Microsoft's Azure cloud technology.
According to ZDNet, Arcadia will replace the Rio video game streaming technology that Microsoft previewed in 2013. The report is backed up by a job advert for a senior software engineer, which mentions the Arcadia codename.
"The Operating Systems Group (OSG) Arcadia team is leveraging many new app technologies to bring premium and unique experiences to Microsoft's core platforms," it states. "We are looking for bright, talented engineers to help the next big thing for Microsoft."
A separate job advert mentions the streaming team and confirms that the company is looking to "bring premium and unique experiences to Microsoft's core platforms".
It is possible the technology will be unveiled during Microsoft's Windows 10 event on January 21.
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