Microsoft (NSDQ: MSFT) is in discussions to purchase Israeli startup 3DV Systems for $35 million, Haaretz.com reported this morning. According to the report, Microsoft intends to use the company’s technology, which enables gamers to control 3DV games using a camera and body gestures, to add to its Xbox offerings. The company’s ZCam product can also be used for video-conferencing, though the utility of that for Microsoft is unclear.

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This could be a case of investors cashing out amid signs that the global economy won’t be gaining steam anytime soon. Investors Elron, a member of Nochi Dankner’s IDB group, the venture capital funds Pitango and Kleiner Perkins Caufield & Byers, and RDC Rafael Development Corporation have reportedly pumped nearly $40 million into the fledgling company.