Avatar Kinect, a new experience which promises to bring a player's avatar to life, was announced by Microsoft during its CES 2011 keynote.
Thanks to facial recognition technology, a player will not only be able to control their avatar's movements but also their expressions; when they smile, frown, nod and speak, the avatar will do the same.
Xbox LIVE members will be able to get together with friends and interact in over 15 different environments. You'll even be able to record conversations and share them on Facebook.
The new service will launch in the spring and is exclusive to Gold members.
This isn't going to appear to everyone, but it does add another social element to Xbox LIVE's services, bringing more personality to the already available chat functionality.