On Tuesday we reported that Microsoft spokespeople had claimed that the Xbox 360 will be 'backwards compatible with some top-selling titles'. While at the time we speculated that this might mean that the device would use software emulation rather than embedded hardware, we've now got to the bottom of it.

Microsoft have explained that current Xbox games will simply be incompatible with the 360. The problem being, of course, that while the Xbox uses an Intel CPU and an nVidia graphics unit, the 360 comes equipped with an IBM processor and ATI GPU.

Xbox games will all theoretically be able to play on the next gen XBeast, but only if they are recompiled. Needless to say, unless you are some kind of 1337 hax0r, that's not the kind of procedure you're going to be able to carry out at home. We imagine that they are saying you'll be able to purchase the same old Xbox titles, but formatted instead to work on the 360. This explains why they said only 'top-selling' games - each title will have to be re-manufactured to run on the 360, and this will be driven by demand.

It's difficult to see what would induce people to buy games that they already own just to avoid the hassle of plugging their old 'box in again. The obvious solution to us would be some sort of exchange policy where people can trade in their old software for a 360 friendly-version.