With Microsoft’s next-gen console firmly a now-gen reality thanks to an impending one year birthday, Microsoft have made dozens of improvements, including 1080p HD output, available free of charge. Is it enough to fend off the competition?

From today, US Xbox owners will be able to download a free system update that provides more than 85 new features and enhancements, including support for native 1080p games and movies, faster Arcade game list display times, and even more choices when it comes to video playback options.

While the US Xbox site is brimming with information about this update, the Australian Xbox website is strangely bereft of similar news, although this may well have changed after this article goes to ‘print’, and if it does, we’ll update that here.

Chances are, however, that this update will apply to all Xbox 360 owners around the world, as it is a significant update that no-one should miss out on. The update will be downloadable free of change through the Xbox Live service, which is free through Xbox Live ‘Silver’, or through the paid Xbox Live ‘Gold’ service which allows you to compete and enjoy online gaming against other players around the world.

If you own an Xbox 360 ‘Core’ system with no hard drive, you can thankfully still access this update. For those Xbox 360 owners who have not yet signed up to Xbox Live, you will need a broadband connection and a free subscription to the Xbox Live Silver service, but as this is free, it’s definitely worth doing.

It’s interesting to note that this will boost Xbox Live members considerably, even if they only get the update, which gives instant access to many new features.

These include expanded HD playback at 1080p resolution, an improvement over the 1080i HD standard offered previously. This is not only to enable HD DVD movies to play at the full 1080p resolution, it will also allow you to play games at this higher resolution, too.

Of course 1080p will only be accessible if you have an HDTV capable of supporting 1080p. While most high-end HDTVs can now display video at this resolution, many existing HDTVs top out at either 720p or 1080i.

Expanded video playback options are included too. These increase the ways you can enjoy video content on Xbox 360.

Whereas you once needed Windows XP Media Centre edition to stream video content to your Xbox 360, it is now possible to stream WMV video from a Windows PC running Windows Media Player 11 or Windows Media Connect – a definite improvement, especially considering most people are still using regular Windows XP despite Media Centre’s growing popularity.

After the update, you’ll also be able to play video files from data CDs and DVDs, as well as from storage devices like USB 2.0 flash drives and Xbox 360 Memory Units. This, of course, is something that should have been included from day one, but at one year later, it’s definitely better late than never.

Xbox Live Arcade has also been enhanced. You can set your Xbox 360 to automatically download free trials of the latest Xbox Live Arcade games. As Microsoft points out, this eliminates the need to manually search for new downloads on Xbox Live Marketplace each time a new game trial is released, allowing you to ‘get in and play right away’.

There are plenty more improvements, with more information and a complete list available here.

It’s good to see Microsoft releasing what amounts to a pretty major update for the Xbox 360, just in time to help thwart the threat from the Sony PS3 and the Nintendo Wii. If Microsoft want to sell 4 million more Xboxes over the holiday season, this free update is a great way to kickstart those extra sales.

Whether it will be enough to help shift those extra millions of Xboxes in the face of real competition at last is yet to be seen, but so far, it’s looking good.

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