The rumoured Windows 8 update codenamed Blue has all but been confirmed in a leaked video. Designed to show updates to the Fresh Paint app for Windows Blue, Microsoft's chief technical strategy officer Eric Rudder talks about Blue and his plans for it.

The concept of Blue is to tie Windows Phone 8 and Windows 8 closer together, by including services from each platform. The update is going to come in at a cheaper price point than normal, Mountain Lion-style, and should bring changes to the user interface and new features - one being the watercolour tech shown in the leaked Fresh Paint video. 

It should mark the start of yearly updates from Redmond and will, we hope, arrive mid-2013. The leaked video all but confirms its existence but doesn't hint at a precise release date or price.

It does show Fresh Paint in action though, which is impressive, to say the least. The watercolour produced in the demo is quite amazing. It reminds us slightly of Paper on the iPad which, just like Fresh Paint, can be controlled with your finger.