Microsoft’s David Cutler.

JAN. 18, 2012 • The San Francisco Chronicle reports that long-time Microsoft engineer, Dave Cutler, has been assigned to the Xbox team. Cutler has so far been instrumental in operating system design at the firm since Windows NT. The company says Cutler’s role is to transition the Xbox into, “a complete home entertainment device.”  Cutler most recently was assigned to Microsoft’s cloud computing platform.

Impact: Cutler’s transfer to Xbox system development is intriguing, but we’re not so sure the common supposition is accurate that the move proves an Xbox 360 replacement is imminent. Microsoft still has a lot of plans for enhancing the existing 360. Building on the Kinect as an interface tool is one area, but we can easily see where cloud storage and streaming could blend in well with existing hardware options. In any event, Microsoft is proving that it can get a lot more life out of the platform by adding on non-traditional functionality.