At a gala event at its Redmond campus, Microsoft on Tuesday revealed that its next-generation Xbox video game console will be named Xbox One and will include the expected feature-set, including a bundled next-generation Kinect sensor and Blu-Ray optical drive. The system will hit the market "later this year" alongside Sony’s PlayStation 4.

There were no major surprises at the reveal event, though I heard the day before that the planned subsidized version of the console—which would require a two-year commitment to Xbox LIVE Gold for $15 per month—was dropped at the last minute. The single Xbox One console will cost $499, my sources say. (Microsoft declined to reveal the price at Tuesday's events.)

The hardware is of course next-generation and built for the future, with 8 GB of RAM compared to 512 MB in the Xbox 360. It features three OSs in one, Microsoft says, but it’s really just Windows 8 Core melded to a next-generation version of the previous Xbox OS.

The device itself is surprisingly boxy, a slab-like black design with a slot-loaded optical drive with an external rather than integrated next-generation Kinect sensor and an evolved hand controller. Microsoft says the device is “nearly silent,” a huge improvement over the original Xbox 360, which was “nearly deafening.”

There are some innovative new aspects to the device though. It integrates with cable TV systems, though it’s not clear if this is a universal feature or requires specific partnerships. It can multitask with a Windows 8-like Snap mode in which two apps appear onscreen side-by-side, and it can switch between experiences instantaneously. Voice and hand gesture control have both been improved dramatically. You can group video call in HD with Skype, browse the web with Internet Explorer, and control the action with your Windows Phone handset or, via a next-gen Xbox SmartGlass app, other devices.

And a “new” version of Xbox LIVE—which, yes, will still require a paid subscription to get most useful features—is more personal, Microsoft says, with dynamic and changing achievements that tell a “personal story” and not just describe what you’ve done in a game. The Xbox LIVE infrastructure has apparently been beefed up in important ways and will give developers access to “direct game computation” on the fly, which sounds suspiciously like Azure integration.

Ongoing coverage of the Xbox One reveal is available now on the SuperSite for Windows.