A few hours ago, Microsoft held the annual E3 Press Conference to showcase what Xbox 360 users can expect to see later this year, as well as further on. Somewhat surprisingly, most of the rumours leaked prior to Microsoft Gamers Day 2008 were confirmed to be true, along with oodles of other enticing announcements that are sure to tickle many a 360 gamer to death. Hit the jump for a titanic onslaught of Microsoft-related news!

The E3 Press Conference was started off by the Senior VP of Microsoft Entertainment Don Mattrick coming on stage to give a short introduction before letting Bethesda’s Todd Howard and Capcom’s Jun Takeuchi take over and give a short demonstration of their upcoming blockbuster titles, Fallout 3 and Resident Evil 5 (more about these two later on today), respectively.

Next, the gaming legend Peter Molyneux appeared on stage to talk about, you guessed it, Fable 2. Fans of the franchise have been no doubt holding Lionhead Studios to the promise of exciting new Fable 2 stuff being unraveled today and they won’t be disappointed when we tell them that the game will feature drop in/out two-player co-op play over Xbox Live as well as locally, as previously announced. Another big announcement made concerning Fable 2 was that the game will be hitting shore shelves in October 2008, as recently hinted at by the Molynator in one of the developer diaries.

With Molyneux walking off stage, Cliff Bleszinski took over (sans the Lancer this time around) and jumped right into a new Gears of War 2 campaign level in co-op mode (no four-player, sorry). Amongst all the exhilarating Hollywood-like action going on screen, we managed to spot the Hammer of Dawn, confirming its return in Gears of War 2 and a new Locust enemy, though we aren’t sure what it’s called. The last bit of the must-see video demonstration was perhaps the most surprising, when Marcus talks Dom into riding a Brumak. Yes, one of those huge Locust bastards! The hype was even more ramped up when Cliff Bleszinski announced a five-player online co-op mode, called Horde, in which a group of players battle a wave after wave of Locust enemies, plus the game’s release, now narrowed down to November 7.

Don Mattrick then returned on stage to say a few words about the Xbox 360’s position in the turbulent videogame market, with a lot of statistics thrown on screen. Before welcoming the Head of Xbox Live John Schappert on stage, Mattrick announced NBC and Universal Studios as the new TV partners who will bring TV series such as Heroes and The Office to the Video Marketplace. Also, starting today, Xbox Live users can download a selection of new movies resulting from the NBS-Universal deal, including the following:

• 12 Monkeys
• Fast and the Furious
• The Bourne Supremacy
• The Mummy Returns
• American Pie

As far as the Video Marketplace is concerned, Microsoft also officially announced an exclusive partnership with Netflix which will allow Netflix subscribers to instantly stream movies and TV episodes from Netflix to the television via the Xbox 360 this Fall. Even better is the news that all you need for this to work is a Netflix subscription and an Xbox Live Gold account.

With that said, John Schappert walked on stage to confirm many of the rumours from May, from the Mii-like Avatars to an all-new Dashboard and much more. For better understanding of all the new features that the Fall Dashboard will bring later this year, Major Nelson has posted a letter from the General Manager of Xbox Live, March Whitten, in which the upcoming additions to the Dashboard are clearly stated (more concrete details are to follow over the coming months):

• Play from hard drive. Copy your games from the game disc and play directly from the hard drive. Not only will the drive not spin, but load times are quicker, as well. Of course, you will still need the disc in the tray to prove you own the game.
• Access Xbox LIVE Marketplace on the Web. Browse and purchase Marketplace content whenever you want from Xbox.com and it downloads automatically to your console. Purchase that new map, television episode, the latest Xbox LIVE Arcade game or set up a movie to watch when you get home from work.
• Dashboard built into the new Xbox Guide. For everyone who loves the blades interface, it’s not going away; they are now built directly in to the new Xbox guide. Every feature and option is available right from the guide. You can even access your full games library at all times. No matter where you are (in dash or in game), immediately call up your games played list and directly launch a game.
• LIVE Party system. Create a party of up to eight friends, and stay with them from one game to another, or watch a Netflix movie together, or share a slideshow of your personal photos. It works with all Xbox 360 titles, not just upcoming games. LIVE Party allows up to eight people to chat in the dashboard, so you can meet up before playing.
• Xbox LIVE Primetime. This whole new category of games is going to give you more reasons to get online with your friends. Games will support everything you’d expect, like Achievements and leader boards, but many of these games will include real prizes. You can invite your friends, and even set a reminder for an upcoming show. Each game is broadcast simultaneously, so everyone is answering the same questions. Many events will have a live host, calling the shots as they happen.
• Avatars. Your online identity started as a Gamertag - it then grew into a personalized Gamercard. Now, it has evolved even further into avatars. You can express your style, check out new outfits and share this with the community. Avatars will also be integrated into Xbox LIVE Arcade games, LIVE Party, as well as retail games.
• New display support. Because you asked for it, we are adding 16X10 over VGA or HDMI, and support for 1440×900 or 1680×1050.

The attention was then brought to the surprises Microsoft has in store for the casual audience in the future. On the XBLA front, the following games were announced:

• “Galaga Legions” (NAMCO BANDAI Games). The arcade shooter “Galaga” has captivated players all over the world, and now the legend lives on with “Galaga Legions.” Featuring table-turning game dynamics, updated graphics and vast waves of ferocious enemies, “Galaga Legions” was created by the same team that developed the best-selling “PAC-MAN Championship Edition” for Xbox LIVE Arcade. “Galaga Legions” will debut exclusively on Xbox LIVE Arcade in 2008.
• “Geometry Wars: Retro Evolved 2” (Bizarre Creations Ltd./Activision). The latest version of the frenetic retro shooter, “Geometry Wars: Retro Evolved 2” debuts exclusively on Xbox LIVE Arcade in 2008. Newcomers and pros alike will be blown away by the screen-melting intensity and insane new features, including six action-packed gameplay modes, new enemies, scoring strategies and a diverse list of exciting Achievements. “Geometry Wars: Retro Evolved 2” also supports multiplayer mayhem for up to four players, with versus or co-op modes, and features razor-sharp 1080p graphics and new, pulse-pounding music.
• “Portal™: Still Alive” (Valve/Microsoft). “Portal: Still Alive” features the full award-winning “Portal” single-player game from Valve plus a new challenge mode. Designed to change the way players approach, manipulate and surmise the possibilities in any given environment, “Portal” has earned more than 70 industry honors for its innovative gameplay, with more than 30 Game of the Year Awards. Solve physical puzzles and challenges by opening portals to maneuvering objects, and yourself, through space. The game is debuting on Xbox LIVE Arcade in 2008.
• “UNO RUSH™” (Microsoft). “UNO RUSH” is a challenging and exciting party card game for up to four players. Developed by the same team that brought the original, best-selling “UNO®” to Xbox LIVE Arcade, “UNO RUSH” boasts a wide range of gameplay and social features — multiple variants, house-rule options, local and Xbox LIVE multiplay, camera support, avatar support, and more — plus fast-paced gameplay to keep the party going. “UNO RUSH” is coming exclusively to Xbox LIVE Arcade in 2008.
• “South Park” (South Park Digital Studios/Doublesix/Microsoft). Based on the Emmy- and Peabody-award winning show, a “South Park” game (title TBA) is coming exclusively to Xbox LIVE Arcade in 2009.

Additionally, when talking about Banjo Kazooie: Nuts & Bolts, Shane Kim revealed that the original Banjo Kazooie game will appear on the Xbox Live Arcade. No further details were given. Continuing the long streak of new casual-friendly products, Microsoft confirmed the long-rumoured Lips singing game and a follow-up to Scene It?, as well as announced a brand new game in partnership with Codemasters:

• “Lips” (iNiS/Microsoft Game Studios). “Lips,” an all-new music franchise exclusively from Xbox 360, is the only singing game that offers wireless motion-sensitive microphones and the ability to sing from your own music collection. Start channeling your favorite pop star, because it’s you, your friends and, most important, your music that makes “Lips” the world’s ultimate party experience this holiday.
• “Scene It? Box Office Smash” (Krome Studios and Screenlife/Microsoft Game Studios). “Scene It? Box Office Smash,” the revolutionary movie trivia game on Xbox 360, will ignite your game night this holiday season with totally new questions, movie puzzles and more high-definition (HD) content from real movies including some of Hollywood’s latest blockbusters. Trivia night goes global as players challenge each other online over Xbox LIVE, customize their own characters, and access extra questions and localized content from films around the world.
• “You’re in the Movies” (Codemasters/Microsoft). Get ready for your close-up. “You’re in the Movies” brings the cool factor to kitsch as you live out your dreams of becoming a scream queen, zombie or kung fu fighter. Premiering exclusively on Xbox 360 this holiday season, “You’re in the Movies” is the first and only game of its kind to literally transport players into a magical world of cinema mixed with the hilarious world of improvisation. Using the Xbox LIVE Vision camera, players’ actions are captured and placed into short, riotous films. Performances never end up on the cutting-room floor, and are never the same.

Besides the new information on Rock Band 2 and the breaking announcement of an Xbox 360 version of Final Fantasy XIII, that is all Microsoft had to share with us at the E3 Press Conference. There’s loads to discuss, so why don’t you get right to it?

Update: We’ve got our hands on two new trailers showing off the new features that will be introduced to the Xbox 360 this Fall and Microsoft’s karaoke game, Lips.