By Alfred Hermida
Technology editor, BBC News website, in Los Angeles
Up to 40 games are expected to be available by the end of the year for the Xbox 360, Microsoft says.
A good range of games will be vital to Xbox success
At a news conference in Los Angeles, Microsoft officials said 160 titles were under development for the console, including the best-selling Final Fantasy XI.
Having a wide range of good games is vital to the success of a new console.
This will help Microsoft challenge Sony's dominance in home game consoles with its new machine.
The Japanese giant has also unveiled a new console, the PlayStation 3, which is due out in the spring of 2006.
Nintendo is due to provide more details about its plans later on Tuesday.
The Xbox 360 was showcased last week on MTV, casting a shadow over Microsoft's news event at the Electronic Entertainment Expo, E3, in Los Angeles.
Games like Full Auto for the Xbox 360 promise better graphics
Microsoft did reveal that gamers would be able to play their favourite Xbox games on the new machine.
The 360 will be what is called backward compatible with top-selling Xbox games. But Microsoft's focus is on gaining broad support from game makers for the 360.
It said 160 games were heading for the console, with between 25 and 40 expected by the end of the year.
In a significant move, it announced a partnership with Square Enix. The Japanese game publisher has in the past made games for Nintendo and Sony.
The first fruits of the new deal will be a 360 version of the role-playing fantasy game Final Fantasy XI.
The Final Fantasy series has sold more than 60 million copies worldwide.
The Xbox 360 can stand on its end or on its side
Among the other titles heading for the console is the popular fighting game Dead or Alive 4.
The games giant Electronic Arts, which makes games for all current consoles, also stressed its commitment to the 360.
Its line-up of games includes the racing title Need for Speed Most Wanted, the massively popular Madden NFL 06 and a game of the classic film The Godfather.
The Xbox 360 is due to go on sale in the US for the holiday season, which starts after Thanksgiving. It will be released in Europe and Asia shortly afterwards.
The price of the game system has not yet been announced.
Microsoft said people with its Windows XP Media Center Edition 2005 will be able to upgrade for free to use the Xbox 360's in-built Media Center Extender technologies.
This means people can access to digital music, video, photos, and standard and high-definition television content on Media Center-based PCs via any Xbox 360 console in the house.