Microsoft has apparently signed a license with NVIDIA allowing the company to use NVIDIA technology within the Xbox 360 console. This is a major piece to the puzzle of whether the Xbox 360 would actually be compatible with older Xbox games. During E3, Microsoft announced that it would offer support for best selling titles on the Xbox 360 but it wasn’t clear how this was going to happen. Now it appears that Microsoft will use NVIDIA libraries to emulate the NVIDIA graphics chipset onthe 360 since the new console uses an ATI chipset. Microsoft will also probably need to run an emulation layer for the Intel processor since the 360 uses triple core Power PC processors. There are rumors that Microsoft will also ship some patched executables for major titles on the Xbox 360 which will allow the older games to run. Over time, many expect Microsoft to offer more patches via Xbox Live.

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