Even as Microsoft took the wraps off its new Xbox 360 video-game console last night, the company left a major question unanswered: Will the new Xbox play games made for the old?
The issue, known as backward compatibility, is a key one for game developers and console owners hoping to bring their existing libraries of games along with them to the next generation. One of the reasons commonly credited for the success of Sony's dominant PlayStation 2 is its ability to play games that were originally made for its predecessor.
But as recently as last week, a Microsoft executive said the Redmond company hadn't yet determined whether the new Xbox 360, set for release this year, would be backward compatible.
"We don't know yet, as scary as that is," said Peter Moore, an Xbox corporate vice president. He cited "a host of technical issues" for the uncertainty, without being more specific.
There are fundamental technical differences between the first Xbox and the Xbox 360 in such areas as the central processing unit and the graphics processing unit. In both cases, Microsoft switched to different suppliers in the new console -- IBM for the central processing unit and ATI for the graphics chip.
"We completely changed the processor and the GPU," explained Chris Satchell, general manager of Microsoft's XNA game development platform. "You can imagine that can cause some challenges."
Although Microsoft didn't make any announcement yesterday on the subject, Moore said it should know the answer to the backward-compatibility question by Monday, the day of its briefing at the E3 game conference.
Microsoft plans to continue making the current Xbox even after releasing the new one. But in a research note this week, Wedbush Morgan Securities analyst Michael Pachter predicted that a lack of backward compatibility would "dramatically reduce demand for current-generation Xbox games" and cause sales of the original Xbox console to "rapidly decline."
Pachter wrote that the situation may come down to whether Microsoft is able to license patented technology from one of the processor vendors for the original Xbox, letting it use that technology to enable backward compatibility in the Xbox 360.
It's not clear how much a lack of backward compatibility would affect Xbox 360 sales. In reality, most people end up preferring games specifically made for a new console even if they're able to play games on it that were made for the earlier hardware, said Michael Goodman, senior analyst with the Yankee Group research and consulting firm.
But it's the type of issue that could help Sony and Nintendo in the public-relations battle over the next-generation consoles, particularly if their upcoming machines are backward compatible.
"If you have the capability, and your competitor doesn't, you hype it," Goodman said. "If it pops popcorn and your competitor's doesn't, then you hype that fact."
