Coming this fall in a new dashboard update, Microsoft will "reinvent" the Xbox 360 with a more user-friendly interface, one that borrows heavily from the Wii menu system, which uses "channels" to browse content.
Central to the new interface is Avatars, Microsoft's answer to Nintendo Miis. Avatars appear much more robust and customizable than Miis, and can be used to socialize with up to eight Xbox Live members. "Our vision is to make any experience a shared experience," Microsoft said.
Avatars will also be used to visually show which Xbox Live friends are online, in addition to playing select Xbox Live Arcade games together, commenting on photos together, and watching Netflix downloaded movies, which were also confirmed for Xbox Live marketplace today.