Microsoft is to bring its Xbox Live Marketplace Video Store to Europe on 11 December.
Full-length standard definition films will be available to rent from 250 Microsoft Points (£2), and high definition movies will start at 380 Microsoft Points (£3.20).
Microsoft claimed that the US launch of the Xbox Live Marketplace Video Store had been a "huge success".
Arash Amel, a senior analyst at Screen Digest, said: "As Hollywood turns its attention to selling digital copies of blockbuster movies, the delivery of movies over the internet has become a key battleground for a broad range of service providers."
Amel predicted that the European movie download market will be worth €350m by 2012, up from €17m in 2007.
Robin Truchy, director of Xbox Live for Europe, explained that the launch added to the number of entertainment choices European consumers had on their Xbox 360.
"We want to give them the entertainment they want, in the format they want, when they want it and at an affordable price," he said.
"We were already offering HD games, HD music videos and the option to enjoy HD-DVD films. Now we are offering HD movies to download and rent as well."
Titles available at launch include Harry Potter and the Philosopher's Stone, Harry Potter and the Chamber of Secrets, Teenage Mutant Ninja Turtles, The Matrix trilogy, Zodiac, Ocean's Eleven, The Perfect Storm, Swordfish, Three Kings, The Good German, Training Day, The Fugitive, Risky Business, Space Cowboys, Eyes Wide Shut, Analyse This, Demolition Man, Eraser, Executive Decision, Lethal Weapon 3, Lethal Weapon 4, Mars Attacks, Clash of the Titans, Superman III and Dead Calm.
The Xbox Live service celebrated its fifth birthday earlier this month.
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