Communications agency Goodstuff developed the platform for the campaign, which marks the games giant first stake in the music market.
Xbox's Campfire Sessions will also feature acts Twisted Wheel and Little Boots in a secret outdoor location, which will be presented by Nick Grimshaw and will be broadcast on Channel 4 and 4Music in January.
Universal McCann will handle media planning and buying while AKQA will handle all digital creative.
The accompanying nationwide consumer campaign will be initially digitally-focussed, with an acting as the competition hub.
Fans are asked to submit the one question they would most like to ask their favourite band or artist, while visitors to the site can vote on which they find the most interesting.
Nick Grimshaw and Xbox will select the top ten entrants to attend the gig with ten friends, with chance to direct questions to the artists around the campfire.
Video footage from the event, including out-takes, behind the scenes and interviews, will also be streamed on MySpace.
Press advertising will follow the digital activity and drive fans to Channel 4 and 4Music.
Simon Wilden, planning partner at Goodstuff, says: "We're doing something distinctive in an otherwise over-subscribed brand space and creating a unique social music experience for the winners.
"The competition and eventual gig connects current and potential gamers to the music they love in a new and compelling way."
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