Next Generation has a good story up on whether backward compatibility — the ability to play an old console’s games on a newer machine — matters, or whether it’s just a good PR move that helps reassure parents dropping hundreds on a new system (and placate hardcore gamers).
I’ve criticized Microsoft in the past for its limited backward compatibility on the Xbox 360, but the truth is it really doesn’t matter that much in the end. I don’t think most people go back to several-year-old games that often. I know I don’t.
At some point, Microsoft and Sony should focus on getting all their old games online rather than on the backward compatibility. PlayStation 2 and Xbox games are still too big too host online, but they should start figuring out how to solve that problem. Nintendo’s Virtual Console is going to be great for Wii because the games are right there on the Wii; it may seem like a small matter, but going back to your closet and finding the old games and putting in the discs probably is more a barrier than we think to replaying old games. It’ll be even better for Nintendo because of the revenue it’ll bring in, especially once enough games are up for a long tail effect to kick in.
That’s what Microsoft and Sony need for the Xbox 360 and PlayStation 3. Having lots of old Greatest Hits titles available and playable is nice, but the future is having inexpensive access to everything at one time.
— June 16, 2006