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Project Scarlett rumored to be compatible with Oculus Rift S

Could Microsoft finally be ready to bring VR gaming to Xbox? That's the rumor, according to virtual reality podcast Coffee & VR, which made mention of a potential partnership on its latest episode.

"So we've heard through the grapevine, over on our Discord, actually, from someone we do trust that there may be a tie between Microsoft and Oculus and that they are going to bring the Rift S to the next-gen Xbox," the podcast said. "He's got some good inside sources."

The move would make a lot of sense, in terms of Microsoft finding a way to connect VR to its gaming hardware. While Microsoft has dabbled in augmented reality with products like Hololens, the company lacks a dedicated VR headset of its own. And many believed in the past that VR support could come to Microsoft's Xbox One X console. Microsoft's own trailer for what was then 'Project Scorpio' had a third-party developer touting its VR bona fides, but support never ultimately came to the box.

Project Scarlett, it appears, offers a better path forward.

This wouldn't be the first time Microsoft and Oculus have teamed up, either. When the Rift first started hitting store shelves, the headset actually came with an Xbox One controller included. And given that Microsoft — as far as anyone's aware — still has a stake in Facebook (which owns Oculus), the pairing doesn't sound all that crazy.

Microsoft needs a competitor to PlayStation VR, which Sony confirmed will be supported by its next-gen PlayStation. To get one, Microsoft could either develop its own headset, or team with a third party product that already has a ton of support. Given that Microsoft's Xbox division also wants to grow on PC, the Rift S seems like a logical choice. Whether this all holds true or Microsoft goes down some other road is anybody's guess.

We'll be keeping a close eye out for any more news on Microsoft's Project Scarlett and any steps toward VR the company might take. There's certainly no shortage of gamers who would love to play the next Halo in VR; we'll have to wait and see if Microsoft actually pushes into virtual reality this time around, or if the company is still content watching everything play out from afar.