Ready for another dose of what might be happening at E3? Word around the campfire is that Microsoft is planning on raising the stakes in Xbox Live’s online entertainment sector. The going word is that the software giant is in the closing stages of last minute negotiations with a variety of media groups that will possibly participate in the announcement of their new premium grade of Xbox Live. The new service is said to carry the internal codename “Orapa,” which is the name of a South African town famous for having one of the world’s largest diamond mines. This reminds us of what Microsoft did with Kinect by giving it the codename “Natal” before giving it an official name.

The rumors are so deep with this one, that it is being said that Microsoft is readying multiple demos for their E3 presentation in the event that negotiations fall through with some of the involved parties at the last minute. This new service is said to be solely focused on providing a cable or satellite-like experience and is said to not be video game related. There is no word regarding a potential price point, but we’re expecting more of a month to month service opposed to an annual option like Xbox Live Gold’s current offering.

To further fuel suspicion of this being a reality, is the fact that Microsoft has recently trademarked the names: Fusion Vault, Fusion Genesis and Fusion Sentient. There definitely appears to be a theme with the name “fusion” being used, which very well may tie into this new tier of service. The thought of a Kinect controlled premium television service is enough to make us smirk at our current DVRs and set top boxes.

The past two E3s have been mainly focused on motion controllers, with Kinect and Move revealed in 2009 and demonstrated at 2010′s show. Considering the fact that birds of a feather flock together, maybe we’ll see something similar from Sony as well. Sony’s PlayTV DVR add on has been available in the UK for almost three years and it just might be time to finally bring a similar option stateside. We’re banking on some kind of Google TV integration, but that’s just our two cents. In any event Microsoft’s press conference will be first up to bat on June 6th at 9:30AM PDT and hopefully they’ll be swinging for the fences.