The new 4Gb and 8Gb models feature the Zune Pad, a touch-sensitive button for navigating on the device, and have a wireless feature that can sync the device with the owner's home wireless network.
Whereas these model employ Flash memory, there is also a new 80Gb hard drive model.
Gates said: "Twenty years ago, we bet the company on an integrated productivity suite of word processing, spreadsheets and presentations and we changed the way people work.
"Today we're making big bets on games, music, video and connecting these entertainment experiences to help change the way people play."
The new Zunes will go on sale in North America in mid-November at $149 (£75) for the 4Gb model and $199 for the 8Gb model.
Microsoft also launched , a beta online community website where users can share their music tastes with other consumers.
Microsoft said it had sold about 1.2m of its first-generation 30Gb Zune player. Apple has reportedly sold more than 100m Ipods in the six years they have been on the market.