The new slim model of the Xbox 360 is smaller than the original, and features better ventilation, built-in Wi-Fi and a 250 GB hard drive. Microsoft showed it off during its media briefing today at E3, and announced that it’s shipping immediately. The price of the new model: the same as the current Elite models. $299 USD gets you the new console.

Microsoft showed off a number of games using the system, which was previously known as Project Natal. Among them are a new Forza game, a fitness title from Ubisoft, a dancing game from Harmonix and a new Star Wars game that will feature lightsaber battles.

Kinect promises 15 games at launch, which will take place November 4, 2010.

The service, which has been up since November 2002, enabled online gameplay among Xbox consoles.

Xbox Live is, of course, still available for the current Xbox 360 console.

Microsoft’s spokesperson also provided a reminder to Xbox Live users thinking of modding their own consoles:

All consumers should know that piracy is illegal and that modifying their Xbox 360 console to play pirated discs violates the Xbox LIVE terms of use, will void their warranty and result in a ban from Xbox LIVE.

Although Microsoft has been especially active in banning consoles in the past week, the company also points out that its policy is ongoing, and Xbox 360 consoles found to be modded or playing pirated games may be banned at any time.

In an interview with G4TV, Microsoft’s Aaron Greeberg indicated that he expects the Xbox 360 to stick around for quite some time.

I think we absolutely have a very long life ahead of us. I think what we’re seeing this generation is that we have a console that is no longer limited by hardware. … We see a very, very long future ahead of us as we think about the platform and we’re not even thinking about the next generation at this point.

Greenberg indicates that the power of connectivity through its Xbox Live system is partially responsible for the lifespan of the Xbox 360.

I think that what we did with the New Xbox Experience, and many people said that it was essentially like launching a new console and we did that through the power of software.

Sony had made similar remarks about its PlayStation 3, but theirs seemed, in part, a defense of the console’s slow adoption compared to its competition.  Apparently the company didn’t expect its leading-edge console to really catch on until 2009-2010 anyways.

Microsoft has promised that it’s “just getting started” with the New Xbox Experience, and that more updates and goodies are on the way for the Xbox 360.

The sales of Xbox Live Arcade titles tripled during the week that the new Experience was released, with preference given to some of the Avatar-enabled titles.  Uno, which has been out for years, saw a 650% increase in downloads the day Avatar support was added.

For the week after the launch, movie downloads went up by 49% and TV show downloads went up 30%.  The New Xbox Experience brings these to the forefront, turning the Xbox 360 into a media hub. (Hey, we thought that was Sony’s thing…)

There are over 14 million users on Xbox Live.

On the matter, Molyneux was only able to say, “I think it would be a great thing for this studio to work on.”

“I can’t say anything else on it – I would be killed to death.”

Microsoft has not revealed official plans to begin distributing full games digitally, but the company could easily be preparing for it.  Xbox Live Arcade games and Netflix movies, the company has been pushing digital distribution.  With the failure of HD-DVD, which Microsoft had been backing over Blu-ray, it may be that digital distribution is the way for them to go.

Some analysts even speculated that Microsoft only backed HD-DVD in order to keep the market confused until it could introduce digital distribution as a superior option.  Fable II may be the first game to test the waters, although it’s already experienced high sales on physical media.

Speaking with Kotaku, an Aaron Greenberg, an Xbox 360 product manager, says that he isn’t impressed with the service:

“What Home to me feels like is Second Life for hardcore gamers … It doesn’t feel like it broadens the experience and invites people in. When they unveiled it, it seemed innovative. I think what’s happened is now here we are a couple of years later and we feel beyond that … It feels like 2005 tech in 2008″

One of the biggest points that PlayStation Home tries to make is that it’s a free service, while Xbox Live Gold members have to pay in order to play their games online.  Greenberg insists, though, that no price drops are in Xbox Live’s near future, and that the cost of Live is justified by the service:

“I think we have seen people are willing to pay for the premium experience. When they compare Live, even to Home, there is still a huge gap.”

Greenberg also insists that Xbox Live is prepared for the holidays.  The service, which experienced difficulties last Christmas after an unexpected number of people went online, has reportedly been improved since.  “We are well prepared for the type of growth we expect this holiday,” says Greenberg.

The announcement comes the day before Microsoft releases its highly-anticipated Live Experience to Xbox 360 users.  The new system will improve interaction among players on the network, introduce player avatars and revitalize the Xbox 360′s interface.  Sony is probably hoping to dispel the common conception that its PSN is inferior to Xbox Live, which seems to be preferred by most regular gamers.

Microsoft is very excited about the new Live Experience, insisting that it represents that future of home entertainment content. “With the New Xbox Experience we will reach the next generation of Xbox owners, 25 million and beyond.” said Don Mattrick, senior VP at Microsoft. “We are at a watershed moment, backed by the largest entertainment brands, with an incredible line up of entertainment unmatched in any industry.”

As Mattrick indicated, Microsoft is approaching 25 million Xbox 360 consoles sold.  Compare that to 35 million sales for the Nintendo Wii, and 17 million for the PS3.  Although the Wii is reaching a wider audience, Microsoft is confident that it can maintain its lead over the PS3 indefinitely.

Needless to say, Microsoft has high hopes for its updates, but insists that the new Live Experience is just the beginning.  Xbox 360 players can judge for themselves tomorrow.  The new Xbox Live Experience update will begin downloading automatically on Wednesday when players sign into Xbox Live.

Aaron Greenberg, product manager at Microsoft, tells Kotaku, “we feel confident that we’ll outsell the PS3 this holiday season in North America and in Europe. We’ll do it on a global scale.”

The Xbox 360 is now the cheapest console on the market.  Microsoft also points out that its console sees a higher number of games sold per console than the others.

According to Greenberg, the company is also taking measures to ensure the stability of the Xbox Live service, which suffered downtime last holiday season after an “unexpected” surge of new users joined.