It seems that with Kinect on the Xbox One, there's more than meets the camera's eye. According to Bloomberg, Microsoft for the first time has built its own processor in-house, and it's destined for Kinect. Oddly, there's been no mention of where the chip is actually being built, and there's really no safe guess.
There's little to learn about the chip, but it's certain that Microsoft took its creation upon itself so that it could gain some sort of advantage over competitive solutions. Apparently, the chip powers military-level imaging technology, so I think it's safe to say that this upcoming solution will put the old one to shame. The cost of building its own chip is undoubtedly one of the reasons that the console costs $100 more than Sony's PlayStation 4.
By building its own chip, Microsoft joins the likes of Apple, which has been building its own ARM-based SoCs for its iPhones since the 3GS, and given its latest A6 chip packs a real punch, I'd say it's been working out well for the company. Will it likewise work out well for Microsoft? Time will tell. Time will also tell whether or not this is just the start of things for Microsoft. It chose an interesting chip to kick things off with, and with that much engineering having gone into it, I can't help but wonder if Microsoft will deploy the technology into more than just the Kinect.