Via Tateru Nino on the Second Life Insider comes word (Link) that a “Microsoft XBox” island has broken the virtual surface in Second Life. As Tateru says, Microsoft’s presence isn’t news, but their intentions will certainly fuel speculation, especially with Sony’s Playstation 3 “Home” (reLink) in beta and full release on the horizon.

I tend to agree it’s most likely an advertising effort, but who knows. If Linden Lab does have intentions of going open source and pushing SL as a kind of internet 3D standard, it’d probably be easier to facilitate avatar portability (using the same avatar across virtual spaces) if a “console continent” was constructed from the same underlying codebase.

So if Sony’s PS3 is finally going to have games that make it worth the high price tag, and they are go live with “Home” this Fall, then what better way for Microsoft to respond than with lower prices and perhaps an announcement aimed directly at “Home”?