Xbox 360 Backwards Compatibility Explained

Microsoft press briefing: The most important announcement at the event was the demonstration of the Xbox 360, planned for release this holiday season. Company management stated that the Xbox 360 would be backward compatible for most top selling Xbox games, and pledged support for the current generation Xbox well into 2006. Two weeks ago, we noted our
concern that the Xbox 360 may not be backward compatible with Xbox software due to a change in graphics processor chipset manufacturers from Nvidia to ATI. In a separate meeting with Microsoft management, we confirmed that the company has agreed to pay a small royalty to Nvidia to allow the Xbox 360 ATI chipset to emulate the performance of the Nvidia chipset in reading certain Xbox games. For games written in a single layer
(management assumes that this is a large percentage of Xbox games), the hardware emulation should perform well.

For games written in multiple layers, a further emulation must be provided.