Thousands of people braved the cold for the console's unveiling in central London, which included performances from singers Plan B and Katy B.
Leicester Square was transformed into a fantasy world overrun by zombies from Dead Rising 3 and a Roman legion from Ryse: Son of Rome, while England footballer Andros Townsend battled it out on stage with a competition winner.
With the launch of Sony's PS4 next week, Microsoft has a head start on its rival in the run-up to Christmas and the computer giant wasted no time in setting out its stall for the new device.
"We're proud and excited that Xbox One is going to be the biggest launch in Xbox history," Phil Harrison from Microsoft said.
"Xbox One is a complete, all-in-one system which has the best games, the best online service in Xbox Live, the best entertainment experiences and is built for the future. With the strongest line-up of games we've ever seen for a new console, pre-orders from fans across the UK are at unprecedented levels."
Microsoft said the UK spends more than £1.77 billion on video games - more than on any other form of entertainment including cinema, DVD and music.
Harrison added: "The games industry is evolving and growing fast, and we are proud to have so many British developers and creators helping to drive the new Xbox One era."
Xbox One Released
Xbox One launch(01 of06)
Open Image Modal EDITORIAL USE ONLYCharlie Pulbrook from Sidcup is first person to pick up an Xbox One after the midnight release of the console at the pop-up GAME store at Trocadero in London's Leicester Square. PRESS ASSOCIATION Picture date: Thursday November 21, 2013 Photo credit should read: Matt Alexander/PA Wire (credit:PA)
US-ENTERTAINMENT-MICROSOFT-XBOX ONE(02 of06)
Open Image ModalA giant video screen shows the logo for Microsoft's Xbox One game console November 21, 2013 in New York's Times Square. The Xbox One officially goes on sale at 12:01 am EST November 22. AFP PHOTO/Stan HONDA (Photo credit should read STAN HONDA/AFP/Getty Images) (credit:Getty Images)
US-ENTERTAINMENT-MICROSOFT-XBOX ONE(03 of06)
Open Image ModalMen dressed as Roman soldiers as part of Microsoft's Xbox One game console launch event November 21, 2013 outside the Best Buy Theater in New York's Times Square. The Xbox One officially goes on sale at 12:01 am EST November 22. AFP PHOTO/Stan HONDA (Photo credit should read STAN HONDA/AFP/Getty Images) (credit:Getty Images)
Xbox One launch(04 of06)
Open Image ModalEDITORIAL USE ONLY Mountain Dew promotion staff hand out Mountain Dew products and goodie bags, in Londons Leicester Square during the Xbox One consoles launch event. PRESS ASSOCIATION Picture date: Thursday November 21, 2013 Photo credit should read: John Phillips/PA Wire (credit:PA)
Nikolai Vacca(05 of06)
Open Image ModalNikolai Vacca, left, explains newest XBox One accessories to customers at a Best Buy store on Friday, Nov. 22, 2013., in Evanston, Ill. The Xbox One, which includes an updated Kinect motion sensor, cost $500. Microsoft is billing it as an all-in-one entertainment system rather than just a gaming console. (AP Photo/Nam Y. Huh) (credit:AP)
Emanuel Jumatate(06 of06)
Open Image ModalEmanuel Jumatate from Chicago, hugs his newest XBox One after he purchased it at a Best Buy on Friday, Nov. 22, 2013., in Evanston, Ill. The Xbox One, which includes an updated Kinect motion sensor, cost $500. Microsoft is billing it as an all-in-one entertainment system rather than just a gaming console. (AP Photo/Nam Y. Huh) (credit:AP)
Xbox One allows users to play games, watch TV shows, movies and music, surf the web, and talk via Skype, while recognising the sound of the user's voice to instantly switch between entertainments.
The new console - which went on sale at midnight - costs £429.99 and is being launched alongside brand new games.
Two gaming enthusiasts from London were among the first to play Fifa 14 on the console on a vast screen in Leicester Square.
Ahmed Sheik, 19, from Hackney, east London, said: "It was sharp and the controller felt better."
His friend, Mohammed Hassan, 20, from Plaistow, east London, said: "The graphics were immense and the gameplay was brilliant. The perfect game."
Chat show host and gaming enthusiast Jonathan Ross also attended the launch.
He said: "It's an exciting time. I'm more excited about the Xbox One than I am about the PS4.
"I think they're trying to move the whole technology side of it forward."
Christened "Xbone" by some gamers, the Xbox One is the successor to 2005's long-lasting Xbox 360 and the third device in the Xbox family after Microsoft entered the console market in 2001.
It has a 500GB hard drive, an eight-core processor and a beefed-up version of Microsoft's Kinect system, which allows a camera to track and interpret human body movements.
The UK's leading games retailer, Game, opened a pop-up store in London's Trocadero, which will be open over the weekend.
Hundreds of gamers were given the chance to play the console a couple of hours before it was released.
Kenneth Grinell, from London, played Call of Duty: Ghosts.
"It feels fast. The maps are bigger," he said.
Asked if he was going to buy an Xbox One soon, he said: "I'm waiting for a few more games to come out."
Awkward Video Game Launch Photos
Call of Duty Modern Warfare 2(01 of13)
Open Image ModalErik Cota walks out of the video store with his copy of Call of Duty Modern Warfare 2 video game, early Tuesday, Nov. 10, 2009
Xbox 360(02 of13)
Open Image ModalKevin Sage from south London with his new Xbox 360 on Friday December 2 2005. (credit:PA)
Sony PlayStation 3(03 of13)
Open Image ModalAngel Baredes is the first to purchase the new Sony PlayStation 3 at the Sony Style Plaza in New York at midnight (credit:WireImage)
World of Warcraft: Cataclysm(04 of13)
Open Image ModalBuying 'World of Warcraft: Cataclysm' on December 7, 2010 in Berlin
Call of Duty: Black Ops(05 of13)
Open Image ModalBrendyn Nishimura of Nevada displays his copy of 'Call of Duty: Black Ops' on November 9, 2010 in North Las Vegas, Nevada.
Call of Duty: Ghosts(06 of13)
Open Image ModalZohaib Ali from London is first in the queue to pick up a copy of Call of Duty Ghosts on 5 November 2013. (credit:PA)
PS Vita(07 of13)
Open Image ModalYes, it's him again. This time in February 2012 for the launch of the PS Vita.
Assassins Creed III.(08 of13)
Open Image ModalAnd again! This time for Assassins Creed III. (credit:PA)
Nintendo Wii(09 of13)
Open Image ModalA man carries Nintendo's new Wii console, 8 December 2006, during a special midnight sale in a Parisian store. (credit:Getty Images)
Grand Theft Auto 5(10 of13)
Open Image ModalTaylor Pelling of Sutton poses with his copy of the console game Grand Theft Auto 5 on September 17, 2013. (credit:Getty Images)
Assassins Creed III(11 of13)
Open Image ModalWayne Adams, from Dagenham, buys a copy of Assassins Creed III. (credit:PA)
Sony PlayStation 2(12 of13)
Open Image ModalPlayStation fans wait in line to purchase the new Sony PlayStation 2 October 25, 2000. (credit:Newsmakers)
Halo 3(13 of13)
Open Image ModalAt the "Halo 3" video game launch in Universal City, Calif. on Monday, Sept. 24, 2007.
The 25-year-old said Microsoft still had to win round some gamers who turned their backs on the computer giant after the E3 trade fair when Sony announced that its games would not require controversial "always on" anti-piracy measures just weeks after
Microsoft said its consoles would check in every 24 hours.
Microsoft abandoned the policy, but Mr Grinell said: "They (Microsoft) have gone back on a lot of the policies but the perception is still there.
"It's going to take a while for people to change their minds, but I think they will eventually."
Computer games enthusiast Ahmed Sallam, 25, from Toronto, Canada, played the latest Assassins Creed game and said he would probably buy one in about a week, once he had finished playing the games on his old Xbox.
"It's my favourite system," he said. "It's more for the hardcore gamer, in my opinion."
Martyn Gibbs from Game said: "Last night was incredible. You could almost taste the excitement - gamers have been waiting for Xbox One for years and we saw a massive turnout at the midnight openings at more than 300 Game stores across the UK."
Xbox One Buyer's Guide
Xbox One FIFA 14 Special Edition(01 of06)
Open Image ModalApple TV(02 of06)
Open Image ModalOn first boot you might feel obliged to plug your Sky or TV box into the Xbox One's HDMI-input. But while you should definitely make use of that great feature - which lets you jump from live TV to games and back in seconds - you might want to consider keeping your TV where it is and using the input for something else instead. Everything from other consoles to Roku boxes will work, but we recommend an Apple TV. With its Airplay integration, access to iOS photo and home movie apps, and a great range of movie rental services, it's a natural complement to the Xbox One until more apps are released for the console itself. And it's only £99.
Xbox Live(03 of06)
Open Image ModalSamsung F8000 46-Inch TV(04 of06)
Open Image ModalYes, we know - this is more than just a 'nice to have'. In fact this is the best telly we've ever tested in person, with amazing picture quality and genuinely useful Smart TV features. It's an excellent screen on which to play the Xbox One, and its range of including catch-up apps plugs the gaps in the One's app line-up at launch. The only problem? The price - which is about £1,300 for the 46-inch model.
Additional Xbox One Controller(05 of06)
Open Image ModalFor another £45 you're getting the chance to play FIFA 14 side-by-side on the couch. If you've got a friend prepared to play you, it should be a no-brainer.
Turtle Beach X04(06 of06)
Open Image ModalThe Xbox One has an included headset, but it's weedy and feels cheap. If you're serious about getting the best sound and voice performance from your console, go for the best pair of Turtle Beaches you can get. At £99 the X04 are a good compromise between price (which can get insane) and performance.