Xbox360 Backward Compatibility: Microsoft will pay Nvid..

Some details have trickled out, courtesy of Wedbush Morgan Securities analyst Michael Pachter. In a recent research note, Pachter confirms that Microsoft "has agreed to pay a small royalty to Nvidia to allow the Xbox 360's ATI chipset to emulate the performance of the Nvidia chipset in reading certain Xbox games."

Apparently, for Xbox games that are written in a single layer (which MS management believes to be most of the Xbox library) the emulation should be pretty smooth. The smaller percentage of Xbox titles that are written in multiple layers will require "patches" (separate emulation programs) in order to work. Pachter says that Microsoft currently plans to sell the 360 with these patches already pre-loaded on the included 20GB hard drive. It is also conceivable that any additional patches for other Xbox games could be easily downloaded over Xbox Live.