Microsoft (News - Alert) recently showcased the future of home entertainment at the E3 Expo along with its latest Xbox 360 offerings and 10 exclusive new games, a whole new perspective on television and new options for social networking.

Veteran filmmaker Steven Spielberg was part of a panel at the event that briefed attendees on ‘Project Natal’ and the new controller-free gaming.

The new Project Natal sensor brings together an RGB camera, depth sensor, multi-row microphone and custom processor running proprietary software in a single unit. It tracks physical movements in 3-D and is extremely responsive to voice commands. The sensor is light independent and has virtual intelligence for user-recognition so it’s able to understand commands.

In addition to the new offering, the most popular social network sites like Facebook (News - Alert) and Last.fm are set to be custom-fitted for TV on the Xbox 360. With the addition of  Xbox LIVE Party, they are seeking to make it possible to share movie experiences anywhere, anytime and expand the reach of TV to create a distinctive social network that will bring together over 200 million people worldwide.

With Facebook Connect, users can share their most glorious gaming moments by publishing screenshots from affiliated games directly to Facebook.

Microsoft also said it intends to provide instant 1080p HD movies from Zune video, with 5.1 surround sound which can be played on compatible HD TVs via the Xbox Live network. And plan to expand the geographical reach of the Xbox LIVE to 18 countries by adding Australia, Austria, Belgium, Denmark, Finland and others to the network.