Microsoft still has to announce whether it is working on a TV STB, yet word on its potential demise is already out-- The Wall Street Journal says "it is unclear whether the company will introduce the device."
According to anonymous WSJ sources Microsoft is working on different "simple set-top box device" designs, all offering similar functionality to the likes of the Apple TV or the Roku. More recent prototypes even having Kinect compatibility.
Such a device would cost less than the Xbox 360 console, yet still allow access to the Xbox Live social network.
The WSJ also reports the company is encouraging development teams to write apps using recently developed coding standards making it easier to create programs working on any device (be it Xbox, PC or smartphone) running Microsoft software.