Microsoft has long been rumored to work on their own streaming music service similar to Spotify and Pandora.
The company is now expected to launch it along with Windows 8 later this month.
Microsoft Xbox Music is likely to feature a free edition supported by ads and some limitations.
It should also include a cloud storage feature similar to Google Music and Amazon Cloud Player allowing users to store their own music on Microsoft’s servers (SkyDrive probably) for streaming on the move.
The service is likely to support Windows Phone and Xbox 360 initially. Apps for other platforms should arrive in the future.