More Xbox leaks: Microsoft once considered an OnLive acquisition

There are a whole lot of juicy details included in the recently leaked document that purportedly details Microsoft's plans for its follow up to the Xbox 360. But one of the most interesting bits deals not with the system itself but with competitive cloud gaming service OnLive, which the company supposedly saw as a "potential acquisition target."

Buried in the notes field for slide 7 of the downloadable Powerpoint presentation, Microsoft outlines the potential threats to the "Xbox 720" from competitors including Apple, Google, Sony, and Nintendo. For OnLive, the notes suggest the streaming company has the ability to "up-end the console gaming market by making expensive consoles and PCs unnecessary for AAA gaming."

Pairing with a partner like AT&T could give OnLive the ability to provide subsidized hardware that makes money through game sales and subscriptions, the note warns. Under the "THREAT" section of the note, it mentions OnLive point blank as a "potential acquisition target."

Streaming games and entertainment from the cloud will be a major feature of the "Xbox 720" by 2015, according to the leaked planning document. While the information in that document hasn't been positively sourced to Microsoft, there is some evidence suggesting it could be authentic. The internal presentation dates back to the middle of 2010, though, so any potential acquisition plans could be well out of date by now.

Microsoft and OnLive were recently embroiled in discussions over licensing issues surrounding the streaming company's offering of a service that allows a virtual Windows 7 desktop to operate on an iPad or Android tablet, but the companies worked out the licensing issues by April.

Here's how Microsoft supposedly sized up the biggest potential threats from other competitors, according to the leak:

• Apple TV: Integration with iTunes and iDevices helps increase the value proposition and locks more consumers into the iOS platform. The ability to use iOS apps with Apple TV was also seen as a threat.
• Google TV: The platform had the "potential to become O/S standard for TV" by licensing itself as a free app platform for TV. Could also expand the reach of Android.
• Nintendo "Wii2": Differentiates itself by being "family friendly" and "less expensive" than the competition. By launching first, the system could "defend [Nintendo's] success in broad gaming segments" and "further erode console differentiation" by matching the hardware power of the PS3 and Xbox 360.
• Sony PlayStation 4: Threats from Sony's next system include killer apps, exclusive Sony content, "PSN experiences" and integration with a home consumer electronics ecosystem. Microsoft also expects Google TV to be a "key feature" of the system, apparently.