Microsoft have been developing a rival to iTunes and Spotify known as Xbox Music.

According to a new report Xbox Music will feature music streaming services similar to Spotify’s and downloadable purchases with cloud storage like iTunes. The report comes from Bloomberg (via Eurogamer) who wer told by “several people with knowledge of the situation.”

Music rights are still being sorted, however it is believed that discussions are ongoing with Universal, Warner, Sony and EMI. All those users who utilise the failed Zune Music service will be moved across to Xbox Music.

Apparently, for a monthly or annual fee you will be able to stream music via the service. You can purchase music through the online store without a subscription though.

The online storage facility will also mean you can share your purchases across devices, including the Windows 8 mobile OS and potentially Windows 8 for PC’s too.