By Alfred Hermida
Technology editor, BBC News website in Los Angeles
Microsoft has spelt out its plans to take a convincing lead over rivals Sony and Nintendo with its Xbox 360 console.
Bill Gates made a surprise appearance in Los Angeles
It says it will have sold 10 million units before the other consoles are in the shops.
The software giant showed off forthcoming games, such as Fable 2 and Halo 3, in Los Angeles ahead of this week's E3 games expo.
It also revealed ambitious plans to extend its online gaming network to PCs and mobile phones.
The Xbox 360 hit the shops last November and since then Microsoft has ramped up production to meet demand.
Sony's PlayStation 3 is due out in November, while Nintendo also plans to release its Wii console by the end of the year.
"Before our competition even enters the marketplace, we will have a 10-million-unit head start with Xbox 360," said Microsoft boss Bill Gates during a surprise appearance at the event.
"It's a number we only dreamed about a year ago."
Microsoft is hoping to build on this through a range of new releases over the coming months.
These include the third-person shooter Gears of War and the child-friendly Viva Pinata.
Among the new games unveiled was Fable 2, a sequel to the best-selling title for the original Xbox.
Viva Pinata is designed to widen the appeal of the Xbox 360
And Microsoft teased fans with a trailer for the sci-fi first-person shooter Halo 3, confirming the title would be out sometime in 2007.
The original Halo helped to boost sales of the first Xbox and fans are eagerly looking forward to its latest incarnation.
As part of its efforts to attract more gamers, Microsoft announced that Grand Theft Auto 4, the latest instalment in the blockbuster series, would be available in October 2007 for the console.
The game will also be simultaneous available for Sony's Playstation 3 console.
But the game's maker, Rockstar, has signed up with Microsoft to provide new content for the title via Xbox Live.
A total of 160 Xbox 360 titles will be available in time for the holidays. Aside from shooting and racing games, the company has struck deals to bring retro classics such as Pac Man, Contra and Frogger to the 360.
"These are more than games, they're our shared heritage," said Peter Moore, head of Microsoft's game business.
The games will be accessible via the Xbox Live online network. This is now being extended to PCs running Windows Vista and mobile phones using Windows.
The service, called Live Anywhere, is due to debut next year.
At its news conference, Microsoft showed how it would let gamers see if their friends are logged in either on their console, PC or mobile phone.
Essentially, the company is creating an online gaming community powered by Microsoft devices and software.
"We really think this is a unique contribution and that Microsoft is probably the only company that can pull this off," said Mr Gates.