Microsoft unveiled the Xbox One during a Tuesday video broadcast streamed on Xbox.com, featuring cameos from Steven Spielberg and the makers of "Halo" and "Call of Duty." Xbox One devices will enter the market sometime later this year.
The Xbox One is "simple, instant and complete," said Don Mattrick, president of the Interactive Entertainment Business at Microsoft.
"Your TV becomes more intelligent" with the Xbox One, he said. "It's time for technology to step behind the curtain."
Microsoft employee Yusuf Medhi demonstrated how using voice commands with the Xbox One allows for quick switching of TV screens between live television, video games, the Internet and movies - with greater ease than changing channels on some televisions.
Telling the device "go home" will redirect TV screens to the Xbox home page, while saying "watch TV" will take users to live TV programs.
"We're going to create a new set of universal gestures," Medhi shared with his audience, showing how grabbing at the air in front of the Xbox One, or moving fists apart, can also change the display.
Medhi demonstrated the new "snap mode," which enables multiple screens to remain open at the same time - allowing users to Skype with friends while watching a TV program, or entertain themselves while catching up with a tiresome relative.
ESPN alerts will be available for sports fans with Xbox One, and can be displayed on the TV screen as RSS feed updates appear on computers.
Marc Whitten, general manager of Xbox Live, touted the device's "elegant design," "raw power" and "practically silent operation."
Whitten told viewers of new controllers "designed by gamers for gamers" and a built-in Blu-ray disk drive. SmartGlass, a program that allows Xbox 360 users to turn smartphones and tablets into remotes, is "natively part of the platform" of the Xbox One, Whitten said.
According to Whitten, the Xbox One boasts "three operating systems in one," using the Xbox operating system, the Windows kernel and a third operating system connecting the two.
Rumors about the name of the device were rampant ahead of the Tuesday announcement. Earlier this month the International Business Times "confirmed" that the name would be "Xbox Infinity." That article noted that "rumors" about what the name included "Durango" and "Xbox 720."
The first Xbox gaming console was introduced in 2001 to compete with Sony's Playstation 2 and Nintendo's GameCube. In 2006 Microsoft introduced the Xbox 360, which included Internet capabilities allowing interactive online gaming. The Xbox 360's main competitors are the Playstation 3 and the Nintendo Wii. Xbox's popular Kinect add-on, introduced in 2010, allowed users to control Xbox 360 devices with motions and spoken commands.