Update: Xbox Holidays App Cuts A Rug

Update: The Xbox app launch was delayed at the last minute as a result of minor user interface related problems. Read the followup story.

Xbox Kinect today released a “Dance*Cam” mobile app that lets consumers shoot videos with a smartphone and share them on Facebook. Designed to promote Xbox’s “Dance Central 2” video game, the app encourages users to record themselves dancing to songs from a library of artists including Enrique Iglesias, Sean Kingston, Far East Movement, and La Roux.

Created by digital agency AKQA, Dance*Cam includes an automated editing feature to give the videos polish. Participants can share the vids with Facebook friends while challenging them to make their own in the name of a dancing contest. The app will then combine the two videos into one so the users can post it to their Facebook walls, where other friends can then vote on which is the best.

Releasing the app prior to the holidays is designed to build Facebook and mobile buzz around the product during the shopping season. Pierre Lipton, AKQA group creative director, suggested that Dance*Cam could make fans of the game momentarily feel like celebrities.

“[It] makes you look like one, cutting together a professional-looking music video on the fly,” Lipton said in a prepared statement.

The app works on iPhone, Android, and Windows Phone 7. The game experience was developed by Cambridge, MA-based technology firm Harmonix, which will share the app on its social network accounts. Xbox will push Dance*com via its own social channels and mobile-specific advertising.