Company officials reportedly demonstrated a prototype of the technology during meetings this week with Halo 4 running on Windows Phone and PC.

Microsoft may be following in the footsteps of Sony and developing its own cloud-gaming streaming service, if a new report proves accurate. Sources familiar with the matter told The Verge that Microsoft officials demonstrated a prototype of the technology during meetings this week.

Halo 4 was reportedly shown running on a Windows Phone and PC, streamed from the cloud. The Verge understands that the prototype runs "smoothly" on both devices and that Microsoft has been able to reduce latency on a Lumia 520 device to 45ms.

The prototype is part of a larger Microsoft initiative to stream games to Windows devices, The Verge reports. The demonstration this week reportedly included a Windows Phone with an Xbox controller attached through an unspecified accessory and a "low-end hybrid PC."

The Verge notes that Microsoft's cloud-powered streaming technology has not been given an official name yet, as it is only a prototype. Sony's Gaikai-powered streaming technology will debut in 2014 for the PlayStation 4, before rolling out for the PlayStation 3 and PlayStation Vita later.

"The Microsoft Company Meeting is a great place to demonstrate many exciting possibilities, but we don't have any specific plans to share at this time," a Microsoft representative told the Seattle Times.

Microsoft hinted at tapping into the power of the cloud for backward compatibility on the Xbox One earlier this month.

"There are so many things that the servers can do. Using our Azure cloud servers, sometimes it's things like voice processing. It could be more complicated things like rendering full games like a Gaikai and delivering it to the box," senior Xbox director Albert Penello said at the time. "We just have to figure out, over time, how much does that cost to deliver, how good is the experience."

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