Microsoft will team up with Virgin Gaming to launch Xbox Live Tournaments, a new range of paid-for and free-to-play multiplayer gaming tourneys.
The service, due to launch later this year, will allow players to enter matches against rivals.
Microsoft promises "top titles from leading publishers" will feature.
Entry will take place through a new Xbox Live Tournaments app.
Additional "performance improvements" are also on the way, Microsoft claimed.
"We continue to invest in improving the performance of the Xbox dashboard," the statement read. "Whether you're getting in and out of entertainment applications, browsing the games library or navigating large entertainment catalogs, we are working to make these experiences quick and seamless."