The new players, which will go on sale in November to catch the Christmas market, include an 80GB hard drive model and two Flash-based models with capacities of 4GB and 8GB.
The players will be capable of syncing with a home PC via Wi-Fi and will have FM tuners built in as standard.
Microsoft's Zune Social networking site will include a continuously updated list of what users are listening to, with the ability to share music and implant playlists like in other social networking sites.
"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," said Microsoft chairman Bill Gates at the launch.
"Today we are making big bets on games, music and video, and connecting these entertainment experiences to help change the way people play."
Zune Marketplace is also being updated and redesigned to make it more attractive to consumers.
Microsoft has cut the amount of time people can listen to shared tracks, although they still will not be able to download music to the devices directly by Wi-Fi.
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