There's a reason why we recently recommended the Xbox 360 with Kinect as one of our top holiday gifts.

CNN: Is it time to call the Xbox Kinect a hit?

However, it may struggle to muscle in on a market dominated by big players such as PlayStation and Xbox, one analyst predicted.

BBC: Ouya console

The Kinect sensor now sits next to roughly one third of those Xbox 360 consoles as Microsoft has sold 24 million Kinect sensors since launch.

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Microsoft Points are a current staple of the Xbox Live experience, but almost no one would describe them as particularly pleasurable to use.

FORBES: Microsoft May Be Ditching Their Points System on Xbox Live

The Xbox 360, alongside Microsoft's entertainment industry partners, is at the forefront of that evolution as one of the only devices that brings all forms of entertainment together in one device, while making access to content easy and providing new ways to interact with existing programming.

ENGADGET: Microsoft talks plans for premium content production, details Xbox 360's transition to an 'entertainment console'

Aside from additional horsepower to make better looking games, Xbox One includes the ability to watch TV on one part of a screen while looking at other information, such as a fantasy football league scores or a Skype video chat, on another.

WSJ: Microsoft Shows Off Xbox One Videogame Console

It doesn't take much imagination to look down the road and see an Xbox 2 three or four years out, one that's fully compatible with older games but can also double as a DVD player-recorder and, with the addition of a big hard drive, a personal video recorder.

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