Xbox Live Avatars were introduced with the NXE (New Xbox Experience), a system software update that reinvented user interaction with the Xbox 360.
Developed by Rare Ltd. for Microsoft, Avatars can be customized by the user within pre-set selections of appearance and wardrobe. Rare has regularly released free updates to expand the range of fashions available. A user may only have one saved Avatar appearance per Gamertag, but the physical appearance may be modified or "re-rolled" at any time. The Avatar may have multiple wardrobe choices saved to the user's profile.
Initial criticism of the concept included the claim that the idea was too similar to Nintendo Miis. The key difference being that Avatars were designed to portray a user's presence exclusively and consistently, whereas Miis were designed to be shared, copied, and changed at the user's whim from a large pool of choices.
To provide users with a sense of ownership, Avatars were immediately made available to represent players in certain supported games, instead of their Gamer picture. A Kingdom for Keflings was released along with the NXE update on November 19, 2008, as the first game to use the player's Avatar as a controllable character.
Games supported after a Title Update
In the tradition of offering paid downloadable content on Xbox Live, the Avatar Marketplace was launched on August 13, 2009. Storefronts offering specific styles of wardrobe and pre-animated "props" are available for purchase, inspired by real world brands, or game-specific novelties such as Halo and The Secret of Monkey Island.
In the tradition of unlocking achievements on the Xbox 360, special items for Avatars will be unlockable by meeting certain criteria in games which support Avatar Awards. Note that these awards can exist in games that do not integrate Avatar Support.
Introduced with the Kinect game Wreckateer, Avatar Famestar is a Microsoft Studios program that allows for cross-game challenges in supported games to reward players with points and unlockable outfits.