Microsoft is in serious discussions to buy Mojang, the Swedish company behind the popular "Minecraft" video game, The Wall Street Journal has reported.
The deal is be valued at more than $2 billion and could be signed as early as this week, the Journal said.
"Minecraft" is a game where players build structures with blocks to protect against nocturnal monsters.
The acquisition will add to Microsoft's Xbox video game business, at a time when the competition in the video game console market is heating up.
Microsoft said in April it had shipped 5 million Xbox One units to retailers worldwide since the launch.
In the same month Sony said it had sold more than 7 million PlayStation 4 units as of April 6 and was struggling to keep up with consumer demand.
Microsoft declined to comment on the Mojang reports.