"We've taken security to the hardware level and built it in from the ground up," said Chris Satchell from the Xbox Advanced Technology Group.
"One of the reasons we went with custom hardware design for all our silicon is that it allows us to build security at the silicon level".
"There are going to be levels of security in this box that the hacker community has never seen before."
Part of the motivation behind this is to prevent people from using the 360 to watch pirated films or TV shows.
But Mr Satchell admitted no system was fool-proof and that, with enough time and dedication, the security on the Xbox 360 would be broken.
"There're some really bright people in the world with some really expensive hardware," he said.
"I'm sure sooner or later someone will work out how to circumvent security. But the way we have done the design doesn't mean that it will work on somebody else's machine."
Fans have modified the first Xbox to turn it into a media centre, upgrade the hard drive or allow it to play imported games. Consoles such as the Xbox and PlayStation 2 can be modified by chips that are soldered to a console's main circuit board to bypass copyright controls.
The chips allow people to play games purchased legitimately in other countries, as well as running backup copies.
Microsoft's 360 is set to be the first of the new wave of games machines to hit the shops sometime before Christmas.
The basic Xbox 360, dubbed the Core System, will retail for $299 in the US and 299 euros in Europe.
The fully loaded console with all the accessories will sell for $399, 399 euros. Sony's PlayStation 3 is due to be released early next year, with Nintendo's Revolution following later.