Xbox announced deeper customizations with Avatars during the Inside Xbox live stream.
The focus was for avatars to become more inclusive, expressive, and creative for users to be able to further customize.
The new avatar system takes the old one to an entirely different level.
A photo booth will be available to take photos of your avatar with an adjustable camera to tilt, zoom and rotate. Customized background prints will be able to be a part of your photo, with the possibility of then using that image as your gamer pic.
Collaborations with Halo, Gears of War and other games will come out as well, along with plenty of new accessories.
Source: IGN.com Xbox Avatars Update Coming Next Month