Interesting.  But I don't remember hearing anything about that at PDC...

[atnewyork.com]

Top developers at Microsoft are working on a new graphics and animation toolset for Longhorn (the next generation of Windows) that could spell trouble for Macromedia's popular Flash MX and Director MX animation tools, sources familiar with the situation told internetnews.com.

Code-named "Sparkle," the tools under development would be integrated with Microsoft's .NET runtime environment. That would ultimately mean developers could have Flash- and Director-like animation and graphics tools ready-built for them soon after Longhorn hits the marketplace.

One source familiar with the project, who saw examples of the "Sparkle" toolset integrated with Microsoft's C#, said early prototypes have given rise to talk of its potential as a "Flashkiller" or even a "Director-killer," referring to Macromedia's popular Flash animation software and Director tool, which is best known for building small animations for CDs.

A spokesperson for Macromedia said the company does not comment on speculation or rumors about products not yet in release.