Microsoft bought start-up id8 Group R2 Studios as it plans to expand further in technology focused on the home and entertainment.
id8 Group R2 Studios was started in 2011 by Silicon Valley entrepreneur and investor Blake Krikorian.
It recently launched a Google Android application to allow users to control home heating and lighting systems from smartphones. It is believed the acquisition will help amplify Microsoft's Xbox platform.
Krikorian's Sling Media – which was sold to EchoStar Communications in 2007 – made the Slingbox for watching TV on computers.
Krikorian will join Microsoft with a small team, according to the Wall Street Journal, which reported the acquisition earlier this week.
The newspaper said that R2 Studios has been working on ways to display content on televisions which could coordinate with Xbox's focus of adding TV entertainment to its gaming console.
R2 Studios had been in talks with Apple and Google before Microsoft snapped it up, it added. Microsoft also purchased some patents owned by the start-up related to controlling electronic devices.
Krikorian and a Microsoft spokesman declined to comment. The price of the acquisition has not been disclosed.
Krikorian resigned from Amazon's board in late December after about a year and a half as a director at the company, the Internet's largest retailer.