Microsoft accounts work across an expanding array of services and devices. Your Xbox 360, Windows machine, and Skype all rely on an integrated login, but integration can also lead to more access points for security vulnerability. Thankfully, Microsoft has decided to join a growing push in tech toward two-step verification, joining companies like Apple in adding improved security features.
"We remain vigilant in working hard to protect your account, which is why we’re adding an option so you can enable two-step verification to further protect yourself," writes Microsoft's Eric Doerr on the Microsoft Blog. "You should see this option show up in your account in the next few days."

Microsoft had already put two-step verification to use on certain high-risk activities, like changing credit card information on Xbox.com, but now the extra security precaution will be made available across all Microsoft account services. Of course, setting up two-step is still just an option -- you know, in case you enjoy having your stuff compromised.

Over the next couple days, two-step should appear as an option under your account security settings. Once enabled, Microsoft will ask for a security code, provided via a secondary secured device. Hardware incapable of supporting two-step -- like the Xbox 360 -- will require setting up an application-specific password through a browser, similar to Google's two-step process.

As with any two-step system, be sure to keep your information and trusted devices up to date. According to Microsoft, customer service will not be able to update an account wherein the password and secondary proof are both lost.

-Source