Matt Martin 19:51 (BST)
14/07/2008

After a short introduction from Don Mattrick, Microsoft plunged straight into the gameplay for its E3 conference today, as respected game creators took to the stage to show off some of the Xbox 360's biggest titles.

The first game on show was a live demo of Bethesda's Fallout 3 by game director Todd Howard, with the company confirming it will be issuing "substantial" downloadable content for the title, exclusive to Xbox 360 and Windows PC.

Next up was Capcom's Resident Evil 5, with producer Jun Takeuchi showing the first public playable demo of the hotly anticipated title's online co-op play. Takeuchi also stamped a release date on the shooter - March 13, 2009, in Europe and the US and a day earlier in Japan.

Peter Molyneux followed Takeuchi to announce that RPG Fable 2 "is finished," and again, co-operative online play was demoed to the attendees. The title is due this October, confirmed Molyneux.

The fourth title shown to the crowd was Gears of War 2 from Epic Games, with Cliff Blezinski also on hand to play the fan-favourite game co-operatively, revealing a new five-player co-op mode and slapping a release date of November 7, 2008, on the title.

Following the hardcore titles, Mattrick came back to the stage to throw down the gauntlet to rival Sony.

"I'm willing to declare here today that Xbox 360 will sell more consoles worldwide this generation than PS3," he said, before revealing over USD 1 billion has been spent on Xbox Live Marketplace and boasting that the Xbox 360 has sold more units in North America than the PlayStation 3.

Head of Live, Software and Services John Schappert followed Mattrick, stating the Xbox 360 was "designed for continuous innovation," which included social experiences.

Announcing the Xbox 360 will be "completely reinvented through software," Schappert demonstrated customisable avatars for the Xbox 360, which will be fully integrated into games in the future.

The Xbox Live interface and dashboard is to get a overhaul too, and a Live Party feature will allow up to eight users to have a consistent online experience, and share photos and other content.

Xbox Live Primetime will also allow users to experience competitions in real-time, with prizes on offer for players.

The company also finally announced the long-expected partnership with Netflix, with Xbox Gold members who already have a Netflix account able to access movies at no extra charge.

A new title in the Portal series - Portal: Still Alive will be exclusive to Xbox 360 and available as a download via Xbox Live. Other new titles for Xbox Live Arcade include Geometry Wars 2: Retro Evolved from Activision, the original Banjo Kazooie and Community Games including Hot Potato Online, Word Soup and Colosseum.

Shane Kim joined the stage to declare there will be over 1000 titles available for the Xbox 360 before the end of the year. He also talked up new titles such as Rare's Viva Pinata: Trouble in Paradise, a new game using the buzzer controllers unveiled last year - Scene It? Box Office Smash - and new IP from Codemasters and Zoe Mode called You're In The Movies, exclusive to the Xbox 360.

Kim's big reveal came in the form of Lips, the new karaoke game for Xbox 360 and due on sale this Christmas.

Developed by iNiS and shipping with wireless controllers, Microsoft rolled-out pop singer Duffy to add some glitz to the conference, and revealed users will be able to plug in MP3 players to their console and sing along to their own musical content.

Finally, Yoichi Wada of Square Enix joined the crowds to show a trailer for Final Fantasy XIII, confirming the game will be released in Europe and the US the same time as the PS3 version.