While Xbox owners are already able to download some arcade games, Microsoft says that the extended service will offer much more when it launches on November 22 in the US.
The expanded site will enable 360 owners to download interactive demos of games titles and music videos from bands including Franz Ferdinand.
However, the firm said it has no current plans to provide complete downloads of premium titles.
The computer firm describes Xbox Live Marketplace as "your one-stop shop on Xbox Live for downloadable content, trailers, casual arcade games, card/board games, demos, and more for Xbox 360".
In order to appeal to consumers who do not have a credit card, the firm is launching Microsoft Points: Xbox 360 users wishing to pay for products from Marketplace will be able to buy pre-paid cards at retailers, which can be redeemed against online transactions.
Marketplace will comprise two tiers of membership. Silver members will be able to sign up to the service for free. However, Gold members will pay for membership but will receive greater benefits, such as access to new game content before Silver members.
Microsoft hopes that Marketplace will provide it with strong streams of revenue. The group's Home & Entertainment division lost nearly $4bn (拢2.3bn) in four years, money mostly spent on developing and marketing its console.
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