Microsoft on Tuesday staked a claim to the Internet Age living room with an eagerly awaited new generation Xbox One console touted as a home entertainment hub that goes far beyond games.

"Today, we put you at the center of a new generation in the living room," said Don Mattrick, head of Microsoft's interactive entertainment business, unveiling the new version of the popular game console.

The beefed-up hardware is powered by software that allows for instant switching between games, television, and Internet browsing. Microsoft-owned Skype was also integrated for online group video calls.

Kinect motion and sound sensing accessories accompanying the consoles recognize users; respond instantly to commands spoken in natural language, and even detect a person's pulse.

"This is the beginning of a new generation of games and entertainment and a new generation of smart TV," said Microsoft entertainment unit executive Yusuf Mehdi.

Microsoft played to longtime Xbox fans with glimpses of blockbuster games including "Call of Duty Ghosts" and "FIFA" football being tailored for the new consoles.

A beloved 'Halo' science fiction shooter franchise was used to showcase the merging of television and videogame play in Xbox One.

Famed filmmaker Steven Spielberg signed on to produce a live-action 'Halo' television series in partnership with gamemaker 343 Studio.

"For me, the 'Halo' universe is an amazing opportunity to be at the intersection where technology and myth-making meet to create something really exciting," Spielberg said in a video snippet played during the press event at Microsoft headquarters in Redmond, Washington.

Xbox One consoles will be released later this year, according to Mattrick, who did not disclose pricing details.

Microsoft has sold some 77 million Xbox 360 consoles since they hit the market in late 2005. Console rival Sony has sold about the same number of PlayStation 3 consoles, which was introduced a year later.

Meanwhile, Nintendo sold nearly 100 million Wii consoles, which became hits due to innovative motion-sensing controls after their debut in 2006. However, demand for Nintendo's recently released Wii U consoles have been disappointing.

Sony announced a new generation PlayStation 4 system in February but spoke ambiguously about the device, leaving much to the imagination. The PS4 is to hit the market by the end of this year.

"Microsoft wins the next-gen game console launch wars," said Forrester analyst James McQuivey.

"Where first Nintendo offered us a tablet to accompany the millions we had already bought and Sony then offered us a box that we couldn't even see, Microsoft has trumped them both by delivering the Xbox One."

Microsoft has apparently put its hardware and software mastery to effective use, bringing game controllers, tablets, smartphones, voice, and gesture together in the Xbox One.

"I think Microsoft stands a good chance at being dominant in the living room, but they still have some way to go before we can call them the king," said Gartner analyst Brian Blau.

In a move that might irk gamers, Xbox One will not be compatible with titles designed for play on its predecessor.

Microsoft sidestepped whether Xbox One would recognize second-hand disks and require activation fees to play, pumping revenue from used games.

"We haven't gotten into the details of how we will enable those capabilities," Mehdi told AFP.

"We want to make it easy for you to enjoy your games with your friends and make it easy to buy and sell used games."

Pricing was expected to prove pivotal for console owners deciding whether to upgrade to Xbox One. New videogame consoles have traditionally debuted in the $300 to $500 range.

"The hardcore gamer will buy it because that is what they do," said National Alliance analyst Mike Hickey. "Is there enough for the average consumer to go out and buy an expensive new console? That is debatable."

Mehdi maintained that a strong selling point is that Kinect devices, which were sold as Xbox 360 accessories, will be included with Xbox One consoles.

He was not worried about the booming popularity of play on smartphones and tablet computers, saying that it has increased the appetite for interactive entertainment in what has grown to a $65 billion industry.

"Gaming is on the rise," Mehdi said. "Every generation of console gaming has grown and we think it will grow even more with this generation."