Microsoft unveils Xbox One

The Redmond, Wash., company says it has built an "all-in-one home entertainment system" with Skype, live TV, and many other capabilities.

Shara Tibken
Shara Tibken Former managing editor
Shara Tibken was a managing editor at CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide. She previously covered mobile as a senior reporter at CNET and also wrote for Dow Jones Newswires and The Wall Street Journal. Shara is a native Midwesterner who still prefers "pop" over "soda."
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Don Mattrick, president of Microsoft's interactive entertainment business, kicks off the Xbox event in Redmond, Wash. James Martin/CNET
Microsoft on Tuesday unveiled the Xbox One, the newest version of its popular game console.

Don Mattrick, president of Microsoft's interactive entertainment business, said the company wanted to design and build the "ultimate all-in-one home entertainment system."

The Xbox One will be available around the world later this year.

The Xbox One includes games, TV, movies, music, the Web, and apps. It has Skype and live TV capabilities, as well as voice recognition to switch between programs, new gesture recognition, and the ability to operate multiple programs at the same time. And users make group video calls via Skype, said Yusuf Mehdi, corporate vice president of marketing, strategy, and business for Microsoft's interactive entertainment business.

The new Xbox home screen identifies users and logs them in with all their favorite apps and games. It remembers what they were doing the last time they played, and those actions show up on the home screen. A new "trending tab" shows users what's popular with friends and the overall community.

First Look
Watch this: The all-new Xbox One
The Xbox One also includes three operating systems in one -- the Xbox operating system, a Windows OS kernel, and software to connect the two operating systems for multitasking. Microsoft also launched a new Xbox Live system for its updated game console Under the hood of the large, sleek, black device are an eight-core processor, 8GB of RAM, Blu-ray, USB 3, HDMI in/out, and a 500GB hard drive..

Microsoft, which is hosting its special next-generation Xbox event at its Redmond, Wash., headquarters, last introduced a new gaming console, the Xbox 360, in 2005. Since that time, the Xbox has become the best-selling game console in the country. In April alone, consumers spent $208 million on hardware, software, and accessories for the Xbox.

However, the new Xbox launch comes as the game console business faces an uncertain future. More and more people are turning to mobile devices and the Web for gaming, which has resulted in weaker console sales. The Nintendo Wii U, which includes a tablet-like game controller that doubles as a second screen, has faced tepid interest since launching late last year. Sony, meanwhile, unveiled its Playstation 4 in February, but the device isn't expected to hit the market until the fall.

The Xbox One is being positioned as a complete home entertainment system. James Martin/CNET
To help game consoles become more of a living room staple, Microsoft has been incorporating more entertainment capabilities into its Xbox, including media-streaming functionality. Throughout the event Tuesday, Microsoft positioned the Xbox One as an entertainment system, not just a game console.

This story is being updated as events unfold in real time. See our live blog for ongoing coverage, including video.

Live from Microsoft's Xbox One reveal (pictures)

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Updated at 10:45 a.m. PT and 10:55 a.m. PT with additional details.