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"Xbox officials are promising a raft of new games in the coming year to rival the best titles currently on sale.
Microsoft is investing millions into fostering a network of gamers across the world, playing against each other on the Xbox.
Xbox Live was launched in the US on 15 November. It launches in Japan on 16 January and in Europe on 14 March.
Figures released this week by Microsoft showed that more than 250,000 starter kits have been sold in the US, selling out in many stores.
Officials say Xbox Live has boosted the sales of games which can be played online, like MechAssault, Unreal Championship and Ghost Recon.
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Other title(s) for this story: BBC: Microsoft talks up online gaming
""Thanks to broadband, hardware and content will integrate in a new way."
Mr Ando showed off Sony's Cocoon, a device about the size of a DVD player that hooked up the TV to the internet by broadband.
The machine runs on Linux and has a hard disc that can record 100 hours of video. It is already gone on sale in Japan.
"Cocoon will transform TV into an interactive, intelligent experience," said Mr Ando.
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Other title(s) for this story: BBC: Sony offers vision of 'reborn TV'
