LOS ANGELES (AP) — Microsoft has its head in the cloud with Xbox One.

The company focused on how cloud computing will make games for its next-generation Xbox One console more immersive during its Monday presentation at the Electronic Entertainment Expo, the gaming industry's annual trade show. Microsoft announced last week that the successor to the Xbox 360 must be connected to the Internet every 24 hours to operate, and the system would ideally always be online.

"The platform features and capabilities exclusive to Xbox One allow developers to push the boundaries of creativity and take gaming in completely new directions," Microsoft Vice President Phil Harrison told the crowd at University of Southern California's Galen Center.

The upcoming console's cloud computing capabilities were demonstrated by fleshing out dense environments in third-person open-world games like the zombie-fighting sequel "Dead Rising 3" and cartoony shooter "Sunset Overdrive." The racing simulator "Forza MotorSport 5" introduced a feature called "drivatar," which mimics players' driving styles and allows their "drivatars" to play for them offline.

"There's ability to put things in the cloud that you want to have computed, so you can take some of the computing capability that you might require locally — or used to require locally — and then have CPUs in the cloud that actually do some background work for the game," explained Phil Spencer, Microsoft Studios' vice president. "You're actually augmenting the power of the box that's sitting right in your living room."

Microsoft revealed the console, which it has billed as an "all-in-one" entertainment solution for living rooms, will be released in November and cost $499. The company debuted the console earlier this year at its headquarters in Redmond, Wash. The initial reactions to the device have been mixed.

Other games coming to Xbox One include the historical third-person game "Ryse: Son of Rome," hard-knuckled brawler "Killer Instinct," a bigger edition of "Minecraft," terra-forming simulator "Project Spark" and a new installment of the sci-fi shooter series "Halo."

Monday's flashy event concluded with the debut of the mech-heavy multiplayer shooter "Titanfall," the first game from Respawn Entertainment, which was founded by "Call of Duty: Modern Warfare" creators Vince Zampella and Jason West.

The company said it was doing away with its Microsoft points system for online purchases with its Xbox Live online service, opting instead for local currency.

Microsoft didn't address concerns at Monday's event over connectivity, used games and privacy issues with the Xbox One, which will feature a new version of its camera-based Kinect sensor. In a blog post on Microsoft's site Thursday ahead of E3, the company outlined more details about the console, including restrictions on how previously played or used games could be shared and how frequently the Xbox One must be online.

"For people who are in a completely disconnected state, I think (Xbox) 360 is definitely a great content base for them and a great console, and we'll continue to invest in that," Spencer said after the event.

Microsoft Corp. kicked off Monday's presentation by revealing the Xbox 360 is getting a makeover with a design inspired by the Xbox One.

Yusuf Mehdi, Microsoft's vice president of marketing and strategy, said the updated Xbox 360 is "smaller, sleeker and as quiet as ever." He added it would be available beginning Monday.

The company boasted that hundreds of new games are still coming to Xbox 360, which was originally released eight years ago as the high-definition successor to the Xbox. Microsoft's Xbox 360 has outsold rivals like the Wii and PlayStation 3 from Nintendo Co. and Sony Corp. for the past two years. It has sold more than 76 million Xbox 360 units.