The Xbox is the next generation video game console made by Microsoft. The Xbox 360 is the successor to the Xbox, and competes with Sony's PS3 and Nintendo's Wii as part of the seventh generation of gaming systems. The Xbox 360 was officially unveiled on May 12, 2005, with detailed launch and game information divulged later that month at the E3. It is the first console to provide near simultaneous launch across the three major regions, and to provide wireless controller support at launch. The console sold out completely at release and at the second quarter of 2007, shipped 11.6 million units worldwide. To appeal to a broader audience, it is available in three versions, the core system, the premium, and the elite which includes a massive 120 gb hard drive.

The Xbox 360 Core is the entry level Xbox 360. It was not originally available in Japan, but was later released. The Core system comes bundled with composite video cables, capable of only SDTV resolutions. The Core may output HD signals up to 1080p when connected to separately sold Component or VGA cables. It may also use a separately sold 20 or 120 GB hard drive.

The Xbox 360 Premium, available at launch, includes all the features of the Xbox 360 Core. The Xbox 360 Premium also includes a detachable 20 GB Hard Disc Drive to store game demos, movie trailers, and movies, provide compatibility with Xbox games and store game data. The Xbox 360 Premium also includes a Wireless Xbox 360 Controller, Xbox 360 headset, while some regions feature an Xbox Media Remote or pre-paid 12 month subscription to Xbox LIVE Gold. In July 2007, the premium version of the Xbox 360 began featuring HDMI output. The console's packaging displays the HDMI logo to reflect this addition.

The xbox360 Elite are the third and most expensive variation of the console and are unique in that it includes HDMI output, a 120GB hard drive, and a matte black finish. The Elite retail package also includes an HDMI cable and a black controller and headset to match the system's black finish. On March 27, 2007, Microsoft confirmed that the Elite would be released in the United States on April 29, 2007 and in Canada on May 4, 2007 permanently and not a 'limited edition' version as originally thought. The initial release price was US$479.99. This version lacks the lights on the power button, not being able to show the three red lights when the system fails.

The Xbox 360 began production only 69 days before launch. As a result, Microsoft was not able to supply enough systems to meet initial consumer demand in Europe or North America. Many potential customers were not able to purchase a console at launch. This lack of availability caused Xbox 360 bundles to sell on eBay at inflated prices; some auctions exceeded US$6,000. Forty thousand units appeared on eBay during the initial week of release; this was 10% of the total supply. By year's end, Microsoft had shipped 1.5 million units; including 900,000 in North America, 500,000 in Europe, and 100,000 in Japan.

5.4 million Consoles have been shipped to retailers in the United States and, as of July 18, 2007, 420,000 units in Japan. Although the console is a success in the United States and Europe it continues to struggle in Japan, placing third in the market. At E3 in May 2006, Bill Gates announced that Microsoft would have a head start of 10 million units by the time Sony and Nintendo enter the market. Microsoft later specified that goal and estimated shipments of 10 million units by the end of 2006, a target it passed by 400,000 units.

Bill Gates spoke of plans to integrate several Microsoft services into one entity with Live Anywhere. This service will allow multiplayer games and communication possible between Xbox 360 and the Windows Vista operating system for the PC. Shadowrun was the first game announced to be compatible with Live Anywhere. E3 2006 was the first large scale show after the console's launch and the first trailer for Halo 3, the sequel to the original Xbox's best selling game, was shown there. Fable 2, a sequel to the Xbox's best-selling role playing game, was also shown, along with Mass Effect and Too Human. Several games originally released on PC have also been released on the Xbox 360, such as F.E.A.R. and Quake 4. GTA 4 was shown and will be the first title in the series to be released for the Xbox 360 the same day as its PlayStation 3 counterpart. Microsoft announced new titles, along with information on future releases. Splinter Cell: Conviction, set to release after Splinter Cell: DA , was announced to be exclusive to the Xbox 360, as were Bioshock.