According to an article in the New York Times, the software giant's offices in Redmond and Silicon Valley have teamed up to create the "Computer Architecture Group." According to Charles P. Thacker -- a veteran of the venerable Xerox PARC facility and the Microsoft engineer who will head the Silicon Valley group -- one reason for the inception of the CAG (as it's become known to, well ... us) is because "Microsoft needs to begin thinking about the next-generation design of its Xbox game console."
A Microsoft spokesperson was quick to point out to GameDaily BIZ that Microsoft "has no plans to design and test computer chips. This is research, not product development." Well, fine. But if it's not going into the next-next-generation Xbox (720?) what are they going to do with all that research then?
[Via Xbox 360 Fanboy]