The next-generation console was shown off alongside a new Kinect sensor¹ and a redesigned gamepad.

 

The US firm described the voice and gesture-controlled machine as an "all-in-one" system offering games, live TV, movies and music.

 

The firm's Entertainment and Devices Division accounted for $9.6bn (£6.3bn) worth of sales in Microsoft's last financial year. 

 

That only represented about 13% of its total revenue for the period - but one analyst² said the importance of this launch should not be underestimated.

 

"Microsoft is very strong in business software and the enterprise cloud business, but its consumer businesses are facing tremendous challenges: PCs are declining rapidly and Windows Phone handsets have only a fraction of the market shares of rivals," said Jia Wu from consultants³ Strategy Analytics.

 

"Xbox represents Microsoft's core strategy in the consumer entertainment market, especially after it sold its Mediaroom video distribution business to Ericsson earlier this year. 

 

"This is also the unique asset which Microsoft has that can differentiate⁴ itself from Apple, Google and several of the other large tech companies."

 

Microsoft's decision to show off its new hardware in the opening minutes of its presentation sharply contrasted with Sony's PlayStation 4 press conference in February when the Japanese company decided⁵ not to reveal the look of its machine - a move that was mocked by some commentators⁶.

 

Despite earlier speculation⁷, Microsoft's machine does not require an always-on internet connection and will run second-hand⁸ games - the firm told the BBC it would provide more details about this "in the coming weeks".

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