Microsoft has beefed up its gaming operation by acquiring Ensemble Studios.
Under the terms of the agreement, Ensemble Studios will continue to create titles from its Dallas headquarters as part of Microsoft's growing pool of top-tier development talent.
Microsoft and Ensemble Studios have worked closely during the past six years to develop the Age of Empires franchise for the PC.
The agreement comes on the back of other games developer buy-outs, including FASA Interactive, Access Software, and Bungie Software Products.
President and chief executive officer of Ensemble Studios Tony Goodman said: "This announcement today is a natural evolution from the relationship we've had with Microsoft.
"Both companies have tremendous respect for each other. This deal gives Ensemble and Microsoft a long-term strategy for doing what we do best - working together to make world-class games."
Microsoft is keen to expand its gaming portfolio ahead of the launch of its X-Box games console later this year.