Nintendo's new GameCube is also being previewed at the four-day event, as are new games for the Sony Playstation 2.
The X-Box, Microsoft's first major entry into the games hardware market, will hit American stores on 8 November, just in time for Christmas.
Speaking at the Electronic Entertainment Expo (E3), Microsoft officials said they hoped to sell between one and one-and-a-half-million consoles - each with a hard disk, DVD drive and broadband internet connection included - over the holiday period.
"X-Box is going to change the way video games the way MTV changed music," the company's chief X-Box officer Robbie Bach said.
"Online console gaming over broadband will change the face of video games forever," he added.
A UK launch date and price for the console has not been announced.
Talk
Microsoft says gamers will be able to talk to each other over the internet connection, eliminating the need to use a keyboard for online chats.
Nintendo's new GameCube is also being previewed at the four-day event, as are new games for the Sony Playstation 2.
The three are set to be engaged in a battle for users when the new Microsoft and Nintendo games machines are launched later this year.
Organisers of the E3 event say it will attract more than 62,000 retailers, developers, investors, distributors and journalists from more than 100 countries. They will be given the first peek at the very latest technology.
So far, the X-Box, Microsoft's first venture into the world of console gaming, has made the most headlines.
"X-Box has more momentum in terms of excitement and hype," according to Electronic Gaming editor-in-chief Ken Hsu.
One worker on the X-Box's website said it had been hard to get work done because the games were so good.
"Our web team has seen - and played - a lot of games prior to working on X-Box," he said on the site.
"But the last week has been full of people yelling in the halls about 'how-freakin'-good' this game looks, or that game looks."
Microsoft hopes to have 15-20 game titles available when the console launches, with all the major programming houses - including Electronic Arts and Sega - signed up to produce them.
UBS Warburg analyst Mike Wallace said the available games would include two of the top sports titles.
Supremacy
"The technology is great, but they need to have exclusive games to make people buy the hardware," he said.
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"They have John Madden and Tony Hawk converted for the X-Box and others, but none of these are exclusive."
There will be a strong battle for supremacy between the different platforms, says Mr Hsu.
Sony's Playstation 2 was launched last year, and some think the Nintendo GameCube could be the dark horse of the trio.
"In terms of power, all are about equal and it really comes down to what games [players] are going to get excited about," Mr Hsu said.
Nintendo has the best games in the world, most gamers will tell you. They have really strong franchises, so they don't even have to show the games and people are excited."
Nintendo has been very tight-lipped about the GameCube's details. It is scheduled to be on sale in North America on November 5 - three days before the X-Box.
The games war has already had one casualty. Earlier this year, Sega, which makes the Dreamcast console, announced that they were ending its production to concentrate on developing software.