Extreme Tech has published a link, to Microsoft's career web site that provides some information on Microsoft's thought on physics in computer games. The posting dates back to 8 August of last year and describes a skill set of a software design engineer to become part of Microsoft's core DirectX developer team - which at this time includes only ten developers.
"Physics and real time, accurate simulation is a key part of the next generation gaming experience, bringing increased realism, greater immersion and more interesting experiences," Microsoft writes and offers a position in which the successful applicant will become "a member of the core engine team who will be primarily responsible for working closely with our Direct3D team, helping to define, develop and map optimized simulation and collision algorithms onto data structures that are optimized for the GPU."
While it is too early to speculate about Microsoft's DirectX physics plans and when such a function may be implemented - DirectX 10 will not include physics capability - it appears to be certain that the company favors a GPU-focused physics solution rather than using available resources in the main multi-core environment of a future PC system: The job requires the engineer to have "extensive experience with graphics shading languages such as HLSL is expected as well as a good understanding of modern graphics hardware and associated algorithms." Knowledge of other physics technologies such as Havok, Ageia, MathEngine, Meqon or ODE "would be ideal," Microsoft writes.