Microsoft says its new video games console, the Xbox 360, will usher in a new era in entertainment. The console was unveiled on MTV in the US.
The Xbox 360 is due to go on sale by the end of the year
The BBC News website looks behind the hype surrounding the unveiling of Microsoft's console.
Q: How does the 360 compare with the original Xbox?
The first thing you notice is the completely different look of the 360. The original Xbox was a big, black box which polarised opinion. Some gamers loved it, but others saw it as ugly. Aside from looks, the 360 is a vastly more powerful machine than its predecessor.
In terms of computing and graphics power, it far outstrips the Xbox. It also comes with a 20Gb hard drive, compared to 8Gb on the original. But more significantly, the new console can act as a home entertainment hub, streaming pictures, music and video from digital cameras, portable music players and computers that run Microsoft Windows XP.
Q: When will I be able to get hold of one?
The Xbox 360 is due to go on sale sometime before Christmas this year. US gamers will be the first to get their hands on it, followed shortly by those in Europe and Japan.
Microsoft has not said how much the console will cost, but experts estimate it may be around the $300 in the US.
The first Xbox was released in 2001
The price of games is also not yet known, with game publishers pushing for higher prices for next-generation titles.
Q: What games will be available at launch?
Microsoft says a wide range of games will be ready for when the 360 hits the shops. It is working on several titles such as Perfect Dark Zero, Kameo: Elements of Power and Project Gotham Racing 3.
Game makers are working on next-generation versions of popular franchises such as Need for Speed, Tiger Woods PGA Tour Madden NFL and Call of Duty. What is still unclear is whether you will be able to play current Xbox games on the 360. Microsoft is aiming to make the console "backwards compatible" but has yet to make this work.
Q: What are Sony and Nintendo doing?
Both Japanese giants are working on their own next generation consoles and will provide more information about their plans next week at the annual games trade show in Los Angeles, E3. But neither is expected to bring out their machines until next year.
Sony, in partnership with IBM and Toshiba, is developing something called the Cell processor. This is designed to be an all-purpose "brain" for the PlayStation 3, and is said to be 10 times more powerful than the processors in today's PCs. Like the 360, Sony's machine is expected to be able to be used as a digital entertainment centre in the living room.
By comparison, Nintendo is focusing solely on gaming. Little is known about its new hardware, codenamed Revolution, but it is expected to be similar in power to the 360.
Q: Why all this fuss about new games consoles?
The games industry is big business. In the US alone, people spent $10bn (£5.4bn) on video games last year. Sony's PlayStation 2 can be found in more than 80 million homes across the world. Microsoft has sold 13.2 million Xboxes in the US and 19.9 million worldwide, while Nintendo is in third place with about 20 million GameCubes worldwide, and around 10 million in North America.
And video games are no longer just for children and teenagers. A third of gamers in the US are in their twenties or early thirties, according to the industry trade group, the Entertainment Software Association. According to the group, 43% game players are women.
The new wave of consoles offer far more than just video games. Microsoft's and Sony's machines could become the way you watch films or listen to your favourite artist at home.