Microsoft is introducing a new online music service that uses the company’s Xbox brand, replacing the previous Zune branding. It’ll appear as part of an update to Xbox games consoles from Tuesday and will also be available on Windows 8 devices when the new OS launches.

Xbox Music will include a free music streaming service, a subscription service and an online music shop. The free ad-funded service will offer a choice of 30 million songs, with the subscription option enabling users to share their music collection across mobile, PC, tablet and console devices.

The full Microsoft announcement is below.

REDMOND, Wash. — Oct. 14, 2012 — If music makes the people come together, as Madonna says, the new Xbox Music gives people all the music they love, every way they want it.

Xbox Music, Microsoft’s new all-in-one music service, specially designed to let users listen to music in exactly the way they want, begins rolling out to millions of people around the world Oct. 16 on the Xbox 360, then to the masses with Windows 8 on Oct. 26.

The all-in-one music service combines the best aspects of free-streaming radio, music subscription services and music purchasing options, all in one elegant package, says Yusuf Mehdi, corporate vice president of Microsoft’s Interactive Entertainment Business Marketing and Strategy. No longer do people have to rely on “service hopping” to get the music they love.

For example, Mehdi explains, here’s a not-that-outlandish scenario for a music lover today: you’re listening to an Internet radio station at work, say Pandora, and you hear a new song you love. You quickly stop what you’re doing and bookmark the song before it stops playing. Later, in the car, you open Pandora to look up the name of the bookmarked song, then you open Spotify so you can use your subscription to listen to it again. Two weeks later, you’re thoroughly in love with the song, and decide you want to buy it so you can burn it to a mix CD you’re making a friend, so you purchase the MP3 on Amazon or iTunes.

“There are a lot of individual services that do a good job, but today there isn’t a service which can pull together the benefits of download-to-own, music subscription, or free streaming services,” Mehdi says. “With Xbox Music, what we wanted to do is bring all of that value in one simple, easy-to-use service, then build some additional value on top — make it really beautiful, and have it work across all of your devices. We’ve been able to simplify the music experience in a really powerful way.”

Mehdi says Xbox Music will have arguably the largest music catalog of all music services, with 30 million songs, and that the experience offers a fantastic way of discovering new music. He says Xbox Music also will be the only all-in-one music service that enables users to listen to music in whatever way — and on whatever device — they choose.

“I’m excited as a consumer because I myself am a big music fan and this really will replace all of those other services I’ve been using,” Mehdi says. “From a business perspective, Xbox Music is a great way to show the world what Xbox means for broader entertainment on their phone, tablet, PC or console.”