Microsoft has launched a new website that allows players to place their avatar in a custom environment. The Free Your Avatar website allows you to use custom backgrounds and text to make a unique image to share with others.
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Free Your Avatar "will include a host of screensavers, wallpapers and festive cards to use as backgrounds, giving people the opportunity to get creative and have fun with the avatars," said a Microsoft press release.
All you need to get going is a Xbox Live gamer tag. You do not need to be signed in to use the system.Source