There's been a flurry of activity around the backwards compatibility feature of the Xbox 360 lately. Clearly, this has been a tough feature for Microsoft to make, maintain, and to promote. Just under 250 original Xbox games are compatible with the Xbox 360, which is less than a third of all the games available. Peter Moore made comments recently stressing the Xbox's new titles over backwards compatibility, and promptly had a significant portion of the Internet jumping down his throat over it, prompting a rewording of his statements, indicating that backwards compatibility is still important to Microsoft and by the way here are another 20 games in a new update.

Next Generation put up a piece on the idea of backwards compatibility in which Christian Svensson, senior director of strategic planning at Capcom, hits the nail right on the head:

It's a security blanket. It makes consumers feel like the investment they've made historically wasn't a waste, even though a scant percentage of them will ever put in a legacy disc into a new platform.

As such, it has value as a bullet point in the system wars and the lack of it is perceived as a major deficiency in the face of consoles that do have it. In reality, people buy new hardware to play new games.

He almost makes it sound like a bad thing. The truth of it is, however difficult it is to actually make these games compatible and test them, it is less difficult than convincing people to abandon their old game collections psychologically prior to purchasing a new console, even if that's exactly what they'll do once they have the new box. It's even harder to do that when both your major competitors are hawking backwards-compatible boxes, and have been doing so longer than you have.

The above really should read that in reality, people play new games on the new hardware they buy. But they wouldn't have bought it if they couldn't have assured themselves that they can pop in an old favorite or two once in awhile without turning the living room into a gaming museum. Whether they actually ever do that, is largely irrelevant.