The Xbox360 (pronounced as "three-sixty") is Microsoft's replacement to its original video game console. The video game was formally launched on the MTV Channel last year, May 12, 2005, to be exact. A more detailed launch, including the presentation of the Xbox's more important information, was made later in the same month at the famous Electronic Entertainment Expo.

However, formal release of the video game was made almost six months later, on November 22, in North America and in Puerto Rico. Other launches included those made in Europe last December 2 and in Japan last December 10. With almost simultaneous launches across the three major regions of the world, the Xbox360 thus became the first of the video game consoles to achieve such a feat. It is also the first entrant in a new generation of game consoles that is expected to provide stiff competition to Sony's PlayStation as well as to Nintendo's Wii.

There are two different configurations of the Xbox360 in most countries, namely, the Premium Package, priced at USD $299, and the Core System, with a market value of USD $399. The latter is not available in Japan though. Nevertheless, Microsoft is offering an identical package which it sells at Y37,900. The price has naturally drawn several negative criticisms, particularly from Japanese customers, since they said that they are able to purchase the game's smaller package at a much lower price in other countries. However, this is usually region-coded for Japan.

During its development stage, the Xbox was more commonly referred as the Xenon, Xbox2, XboxNext, or the Nextbox. It is now considered a seventh generation console, initially developed within Microsoft by a small team headed by Seamus Blackley, a game developer as well as a high energy physicist. Rumors of the video game's development first came out during the latter period of 1999 when Microsoft big boss Bill Gates said in an interview that a gaming/multimedia device was important for multimedia convergence in the new times of digital entertainment. Consequently, early the following year, the video game's core concept was announced in a press release.

Analysts believe that the Xbox 360 is Microsoft's way of capitalizing on the burgeoning video game market, especially with the PC market experiencing stagnant growth after the http://dot.com bust. The video game industry provided Microsoft the opportunity to diversify its product line, which, up to the 1990s, was heavily concentrated in software manufacturing.

Aside from this, the Xbox360 idea also came about because according to Heather Chaplin and Aaron Ruby, authors of the book Smartbomb, the remarkable success of Sony's PlayStation gaming consoles in 1990 sent a worrying message to Microsoft. The growing success of the video game industry, where Sony is considered a pioneer, threatens the PC market, an industry long dominated by Microsoft and upon which most of the company's revenues was heavily dependent. A venture into the video game business, through the Xbox, was the next logical step for Microsoft, said Chaplin and Ruby.