The news was given during Xbox Daily briefing at the E3 2017, when Microsoft demonstrated the future of avatars with a trailer (see below) that shows avatars skateboarding, riding motorbikes or moving with the help of a wheelchair.
It is obvious that when the new avatars arrive, you will be able to fully customize your online character, choosing among various new body type options, (gender neutral) clothing, accessories and props. As it was, female avatars were not able to purchase clothing that was intended for male avatars and vice versa. Now what used to be a problem for many users is a thing of the past.
What Microsoft wants is to give you the opportunity to express yourself creatively and create an avatar that suits you and your wishes perfectly.
The revamped avatars are expected to launch this year.