On Auguts 11, when the next dashboard update hits the Xbox 360, a new ‘Games on Demand’ service will be included, allowing players to download full retail Xbox 360 including the likes of Mass Effect, BioShock, Assassin’s Creed and more. However, though these are great titles, the service will not have new games on it as soon as they release.

“There are a lot of complex issues to deal with here, especially if you start talking about day-and-date release with retail availability–which is not something that we’re talking about at all, today,” Kim said, adding, “When it comes to us saying we want Games on Demand to enable day-and-date release of new titles, then there’s certainly a lot of work we would need to go through. We’re not anywhere close to that world today.”

The Xbox LIVE update will also include a more enhance Netflix and an Avatar Marketplace.

Xbox 360 Games on Demand won’t feature new games [GameSpot]