Microsoft shopping Xbox Entertainment Studios, Warner reportedly interested

Microsoft appears to be shopping around its Xbox Entertainment Studios before writing it off completely.

According to The Hollywood Reporter, talks with Warner Bros have been taking place and it could merge XES with its Machinima property.

A Warner spokesperson commented that the firm is “constantly having preliminary discussions regarding business opportunities with numerous companies at any given time."

Therefore, "a conversation is just that - a conversation."

The source told the site talks are preliminary and an agreement between Microsoft and Warner may come to nothing.

Microsoft's Phil Spencer announced in July the firm would close its Xbox Entertainment Studios in the coming months, but still had several XES projects in works.

The live-action Halo series was confirmed as safe and still in production.