Microsoft will reportedly launch Avatar Kinect next Wednesday, July 27.
Backing up previous reports, sources told WinRumors that Avatar Kinect will be released as part of Kinect Fun Labs, a service launched during E3 which enables users to download and play around with Kinect innovations.
The Avatar Kinect software uses Microsoft's motion sensor to recognise your facial expressions and represent them on screen through your avatar, allowing groups of users to sit around chatting in a number of themed virtual environments.
A mandatory Xbox 360 system update is being rolled out today. According to Microsoft, "there are no new features that will show up once your system has been updated. This update is preparation for additional system enhancements coming to Xbox 360 later this year."