Microsoft acquired Skype in 2011 for an eye watering $8.5bn.
Skype will replace voice chat on Xbox Live according to sources close to the matter.
As reported by CVG, Microsoft is aiming to pull together its communications technology surrounding the voice-over-IP software. This will not affect the Xbox 360 but the next generation Xbox console where Skype will be the default voice chat software solution.
As well as becoming further integrated with the Xbox Live platform, Skype will also replace Windows Live Messenger, formerly known as MSN Messenger, Microsoft's popular instant messaging service which will be retired during the first quarter of 2013.
A recent job ad posted by Microsoft's UK Skype office asked for applicants who could work on Skype's user interface and with a particular focus on larger screens and the next generation of Xbox.
The plan to consolidate various messaging products with Skype is consistent with Microsoft's apparent wider intentions to provide a continuous service across multiple platforms.
At last year's E3, Microsoft debuted Xbox Music, Xbox Video and its tablet SmartGlass app, all of which appear to be part of the company's efforts to expand out into general media as opposed to focusing purely on games.
Microsoft acquired the Luxembourg-based Skype in 2011 for $8.5bn (£5.2bn), marking it as the most money the company has ever spent on a single acquisition.