Software giant Microsoft is in talks to buy Israel's 3DV Systems, a maker of three-dimensional video imaging, financial website TheMarker.com reported on Tuesday.

It said Microsoft would buy 3DV for $35 million. To date, 3DV, partly owned by Elron Electronic Industries has raised about $38 million in private funding.

3DV Chief Executive Zvika Klier declined to comment.

3DV Systems develops virtual reality imaging technology for digital cameras that it sells, called ZCams. Its main target is the gaming market, TheMarker.com said.

It added that Microsoft plans to use 3DV Systems' technology in its own gaming technology, such as in the Xbox 360.

(Reporting by Steven Scheer)

Microsoft Xbox Israel