NEW YORK (CNN/Money) - Two months ago, Microsoft spoke glowingly of bridging the gap between the PC and Xbox. Now the company is considering erasing that gap completely.

While Microsoft has publicly avoided discussing its next generation machine, it has been quietly conducting studies on the consumer appeal of a hybrid device that would play both PC and Xbox games.

"We would be remiss if we didn't look at consumer scenarios that take advantage of our strengths," said Peter Moore, corporate vice president of worldwide marketing and publishing for Microsoft's home and entertainment division. "[But] this is one amongst many, many other consumer scenarios that we're looking at."