Microsoft has revealed a slimmer version of its Xbox One console, the Xbox One S, which will launch in August.
The firm also announced another new console, Project Scorpio, which will offer virtual reality and 4K gaming.
It will be released by Christmas 2017 but no details of a price were given.
The Xbox One S, however, will cost $299 (£210) and include support for High Dynamic Range (HDR) gaming, with extra levels of brightness and more colour.
Pictures of the device, which will also include 4K DVD and Blu-Ray playback, were leaked ahead of E3.
One analyst said many gamers might not be ready to buy a new console so soon after the Xbox One's release.
It's an unusual move to release a new version of a console "mid-cycle", or before a completely refreshed device is launched, according to games industry analyst Ed Barton of Ovum.
"We are in slightly uncharted waters," he told the BBC ahead of Microsoft's E3 event. "There's a risk of the market already being saturated."
However, Sony will also launch an upgraded version of its PS4 console in early 2017.
Piers Harding-Rolls at analysts IHS pointed out the earlier release date for the Xbox One S could give it the edge in terms of sales.
Although much was made of the new consoles' abilities, Microsoft made no mention of its upcoming augmented reality headset, Hololens.