Microsoft's new Xbox console hit stores worldwide Tuesday, kicking off a holiday season battle with Sony's latest PlayStation model, as the coronavirus pandemic creates unprecedented gaming demand around the world.

The Xbox Series X launches just two days before Sony's next-generation PlayStation 5, in a head-to-head likely to dominate the gaming sector this shopping season.

The launches are well-placed to capitalise on a massive spike in demand for gaming. Rising numbers of people around the world are seeking distraction during a pandemic that has killed 1.25 million people and left at least 3 billion more in some form of lockdown since the virus appeared in late December.

But while lockdowns and restrictions may have boosted sales, they have also forced companies to move their launch events online.

Xbox, famous for games such as Halo, Gears of War and Forza Horizon, held an online countdown to midnight for Australia and New Zealand. 

Phil Spencer, executive vice-president of gaming at Microsoft, told gamers on a Facebook live event that they were taking "the first step into the next generation of gaming."

"And you will be the first in the world to experience it."

The pandemic also means no long lines of customers camped outside stores, with the pre-orders snapped up online instead more likely to be delivered to gamers' homes.

But demand has been brisk, and is expected to stay that way, Morris Garrard, analyst at specialist financial consultancy FutureSource, told AFP ahead of the launch.

"As soon as any stock is available, it is going to be bought out, within a few minutes even," he said.

He said some of that activity would be people attempting to buy up stock for resale, but that he expects "a high level of excess demand for these consoles, at least in the short term."

"So talking sort of three to six months, I think we'll see that a lot of people who want to get a console are unable to get a console."

- Swan song for physical consoles? -

Microsoft is hoping its next-generation offering will help close the gap with Sony, whose PlayStation 4 sold twice as well as the Xbox One since they both were released in 2013.

Unlike the PlayStation 5, whose release will be staggered in different countries from Thursday, the Xbox Series X hit the shelves worldwide on Tuesday.

Both Sony and Microsoft have lined up a roster of eagerly awaited games -- headlined by the latest edition of Ubisoft's Assassin's Creed, an open-world Viking epic -- to launch with the consoles, which will offer much more powerful central and graphics processors than their predecessors.

In a competitive industry where focus is shifting to online play, this could be a swan song for physical consoles, with both firms betting on cloud servers to do the heavy processing lifting in the future.

But for now, the Xbox design team boasts that their product, which looks much like a PC, is "the fastest most powerful ever" console.

The kit, which has potential 8K video capabilities, has a faster graphics processor than the PS5, and superior data-crunching power.

The "premium" Xbox Series X costs $499 -- the same price as the PlayStation 5 -- but both companies are also offering cheaper, digital-only "mini" versions of the new machines. On these smaller consoles, gamers will be able to play titles as downloads only, not on disk.

Microsoft's slimmed-down console, the Xbox Series S, costs $299, $100 less than the digital-only PlayStation, a move analysts say Sony can afford as the market leader.