Microsoft struck first at the world's most prestigious video game trade show with a press conference held Monday in Los Angeles. The gaming giant used the event to announce that the dashboard for its Xbox 360 console was going to receive a major overhaul. A system update is coming this fall that will completely retool the system's graphical user interface and give gamers the power to create customizable avatars that will act as digital representations of themselves in the Xbox Live community.

“The new Xbox experience” is how Craig Flannigan, Platform Product Manager with Microsoft Canada, referred to the remade dashboard in an interview shortly after the event. “It's the first time in the history of consumer electronics that a device has been reinvented through a downloadable [firmware update].”

In addition to the new GUI and avatars, players will also be able to create new Xbox Live Parties. These groups allow up to eight friends to engage in a variety of activities together while chatting over their Xbox headsets. Examples of the kinds of activities supported by Xbox Live Parties provided by Mr. Flannigan include viewing photos and movies. (Think of it as watching TV while talking with people on the phone who happen to be watching the same show, just with worse voice quality and a geek factor that is orders of magnitude higher, thanks to that headset.)

Another new feature that will be part of the firmware update is something called Primetime. Details are still sketchy, but, according to Mr. Flannigan, Primetime will “meld television with video games” to create a sort of game show channel. The first title on offer will be a multiplayer Xbox Live version of the TV quiz show 1 vs. 100. It will be one of the first games to support use of Microsoft's new avatars as in-game characters. (No, it's not your imagination; Xbox avatars are sounding more like Nintendo's Miis all the time—perhaps Microsoft will call them Xiis).

Firmware update aside, Microsoft seems not to have too many surprises for this year's E3.

Flannigan mentioned a couple of cute new casual party games in the form of Lips, a karaoke game that lets users sing to music from their own libraries and comes with a motion sensitive microphone that lights up, and a sequel to 2007's Scene It? Lights, Camera, Action called Scene It? Box Office Smash.

The most exciting news on the Xbox Live Arcade front was the announcement of a sequel to Valve Software's popular 3D puzzle game Portal called Portal: Still Alive. Set for release this fall, it will apparently pick up where the previous game left off and offer dozens of new, mind-bending levels.

In terms of upcoming first- and third-party boxed retail games, Microsoft apparently used its event to show new footage of several games previously announced, including Fable 2, Fallout 3, Gears of War 2, and Resident Evil 5. But there was one somewhat shocking announcement: Final Fantasy XIII. Developer Square Enix had previously only spoken about the newest game in their flagship franchise in PlayStation 3 terms, but company president Yoichi Wada apparently used Microsoft's presser to show video of the game running on Xbox 360 hardware. Mr. Flannigan confirmed that the new role-playing game will be released for Microsoft's console the same day it's released on the PlayStation 3, though, unfortunately, he didn't know when that day would be.  

All in all, Microsoft looks set to have a good E3. Nintendo and Sony will set their respective stages on Tuesday.