Microsoft has finally lifted the lid on its next generation console.

Dubbed the Xbox One, the console will replace the now venerable Xbox 360, which was released in 2005. The new console sports an eight-core processor that has more than five billion transistors.

In a launch video, Microsoft said that the new Xbox One would be  “Out to change entertainment forever again,” adding, “You and your TV are going to have a relationship.”

Don Mattrick, the Microsoft’s president of Interactive Entertainment, told gaming journalists at Microsoft Redmond headquarters that the new Xbox One was not just a games console, but “The ultimate all-in-one home entertainment system”.

Among the features, improvements and enhancements are 8GB of RAM, a 500 GB internal HD, USB 3.0, 802.11n Wi-Fi, a Blu-ray drive and three operating systems: The standard Xbox OS, the kernel of Windows 8 for web applications and a third platform that connects the two together.

“We’re designing Xbox One to be your all-in-one entertainment system that is connected to the cloud and always ready,” Microsoft said. “We are also designing it so you can play games and watch Blu-ray movies and live TV if you lose your connection.”

The firm has also completely redesigned its Kinect sensor to better respond to users’ voices and gestures.

The Xbox One will have 15 exclusive games on the Xbox One at launch day, eight of which are new titles. The major one revealed was, of course, a brand new Call of Duty game called: Call of Duty: Ghosts. EA is launching four games for Xbox One in the next year: FIFA, Madden NFL, NBA Live and UFC.

Microsoft will also be teaming up with director Steven Spielberg to produce an exclusive, live-action, Halo series for the console as well as a partnership with the NFL. The new NFL game will allow users to call friends via Skype during games and get live fantasy football updates as they happen.

The firm has touted the Xbox One as a replacement for the set-top box sporting its own guide and voice control. Senior Vice-President Yusuf Mehdi demonstrated how the console switched quickly between channels after saying show names like “Mary and Martha” or “Watch MTV.” Xbox Trending will show you what is most popular on live TV, as well as top on-demand choices.

“No more memorising channels or hunting for the remote control,” Mehdi told journalists.

It also features Snap Mode. This allows you to watch a movie on one half of the screen while surfing the internet on the other half.

Xbox Live also gets a revamp to be more “powerful, personal and intelligent”, according to Marc Whitten, Xbox general manager. It will be powered by more than 300,000 servers, he said. The original Xbox was powered by just 500.

Microsoft said the Xbox One will launch around the world “later this year,” though it didn’t detail when the new box will appear in stores or its price.

Unfortunately old games will not be playable on the old console so no throwing out the Xbox 360 just yet.