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I will say that with the Xbox 360, Microsoft did go the "clean" route and are only doing backwards compatibility via software engines. The 360's power was in no way compromised by the desire for backwards compatibility, and in fact it was only realized it was possible very late in the process. A good majority of Xbox 1 games are backwards compatible, but there are some notable exceptions. Resources do need to work on creating the software drivers for each game to get it to run properly.
In any case, the nice thing with backwards compatibility on the 360 is the fact that every Xbox 1 game is upscaled to 720p widescreen. The PS3 will do something similar for all PS2 and PS1 games. This makes older games MUCH more friendly on newer hi-definition widescreen televisions than playing the older games on the original consoles. The Wii doesn't support hi-def of course, but there's been talk of it doing some type of smoothing for older games.
The best argument is that even if a game is old, it doesn't make it any less fun and will allow people to maximize their investments in older stuff. This also helps the hardware makers too, as launch window line-ups are always sparse, giving people more incentive to buy the new system early if their existing libraries still work. Of course there is a downside for those companies trying to sell new software on the new system, but the reality is their new game should be compelling enough to make people want it regardless.
Bill Loguidice, Managing Director
Armchair Arcade, Inc.
[My collection - www.billandchristina.com/vgamecomp/vgamecomp.htm]
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