By Darren Waters
BBC News Online in Los Angeles
Microsoft has announced that Electronic Arts' (EA) games will appear on Xbox Live, ending three years of deadlock.
Popular titles like Madden NFL heading for Xbox Live
The news came on the eve of the E3 video game exhibition in Los Angeles.
The deal brings popular sports and action titles, such as Fifa and Madden NFL, to Microsoft's online service for the first time later this year.
Microsoft's total control of the Xbox Live system had proved a stumbling block in the past for EA, the world's biggest games publisher.
"It took a while for us to get here but we are committed to great online titles on the Xbox," said Don Mattrick, EA's president of worldwide studios.
A host of US sports stars, including boxing legend Mohammed Ali, were on stage to promote the landmark announcement.
The news conference was also used to highlight some of the most important video games being released for the Xbox console in the coming 12 months.
Microsoft revealed that action sequel Halo 2, one of the year's most highly-anticipated games, would be released on 9 November.
Dead or Alive Ultimate
Star Wars: Republic Commando
Conker: Live and Uncut
The original game was a global commercial and critical hit, selling more than one million copies and helped establish Xbox as a serious contender in the games industry.
"We want to make an incredible amount of noise to publicise this game," said Peter Moore, Microsoft's vice-president of publishing and marketing.
There was no word on the development of the Xbox successor, dubbed Xbox Next.
Instead, Microsoft hammered home the repeated message of "software, software, software".
With Sony and Nintendo expected to make major hardware announcements in the mobile gaming field on Tuesday, Microsoft was keen to stress that its software skills had made it a "clear leader in innovation".
Robbie Bach, Microsoft's chief Xbox officer, told the assembled media and trade delegates that the firm had sold more than 14 million consoles and had almost one million subscribers to its online service, Xbox Live.
"Software is how we have innovated and software is how we will lead," he said.
Halo sequel is set for a November release
Microsoft also announced that it was working to add video chat facilities to its online service.
"We believe video chat is the next logical step in online gaming," said Microsoft's Jay Allard.
The service is being tested in Japan before roll out to the rest of the globe, he said.
In a bid to attract more casual, possibly older, gamers Mr Allard also announced a new service, Xbox Live Arcade.
The service will let people download classic arcade games, reportedly for a fee, which can then be played online.
"It is perfect for the gamer who does not have a lot of time," he said.