Imagine for a moment that every time you bought a new computer, none of your old programs would run on it. This is the problem that Nintendo, Microsoft and Sony face each time they release a new generation of video game consoles. It’s hard enough for many people to justify spending anywhere from $300 to $600 on a new game console, but if you tell them that the new machine won’t play any of their old games they’re liable to walk away from the deal. That’s why “backwards compatibility” is such a selling point for consoles.

For the record, backwards compatibility for consoles isn’t a new idea. The Atari 7800, which was released in 1984, was backwards compatible with the Atari 2600 and played “most” of the Atari 2600’s library of games. You’ll see that “most” term a lot when it comes to backward compatibility. Occasionally game programmers use certain tricks that just don’t work on later console revisions, as those chips have been updated over time — but “most” people are happy to play “most” of their older titles. Backwards compatibility has become such a selling feature that gamers almost expect it. The Game Boy Advance played all Game Boy and Game Boy Color games, and the Nintendo DS/DS Lite played all Game Boy Advance games. The PlayStation 2 played all PlayStation 1 games.

Many systems that didn’t initially support backwards compatibility had that feature added through additional hardware. The Super Nintendo could play NES games by using a Super 8, The Nintendo 64 can play SNES and NES games by using a Tristar 64, the Atari 5200 could play Atari 2600 games using a cartridge adapter, and so on.

It’s ironic that the same reason console companies pitch the idea of backwards compatibility is the one thing they fear the most. It’s a well known fact that console companies lose money on each console sold, and do so willingly with the expectation that eventually you’ll buy some games for it. Sony would be in a terrible spot if everyone ran out to buy a PS3 on launch day and then didn’t buy any new PS3 games, being content to play PS2 games until the price of PS3 games dropped. (In the spring of 2007, Sony’s gaming division posted a one billion dollar loss.) So while console companies aren’t willing to outright give you a console, they are willing to take a loss on each unit sold in hopes of recouping their losses when you start buying games, in which there is a large profit margin.

Just as an example; in the mid-90s while working at Best Buy, I decided to buy a Super Nintendo. As an employee, my discount was “cost plus 5%”. I took a brand new Super Nintendo up to the front counter along with two or three games and a second controller. Each game was priced at or around $50. My cost was $10-$15. The real surprise was the console itself; it was priced at $99. Using my discount of “cost plus 5%”, it rang up for $120! That just goes to show that even retailers are willing to sell gaming consoles at a loss in hopes that you’ll buy even a single game.

(Incidentally, this is why console manufacturers hate second-hand video game sales — because they don’t see a dime of it. Many current-gen game publishers have started including downloadable content that can only be downloaded once per game. Buy the game used and you’re SOL.)

Of course, those are mid-90s prices — console prices have skyrocketed as technology has increased. The PlayStation 3 does a million things that Super Nintendo never dreamed of doing. Heck, my original Xbox has been modified so that it plays Super Nintendo games! But, definitely, the cost increase has been significant. My PlayStation 3 (60 gig model) cost $600 at launch. Add a second controller ($50) and two games ($60 each) and with tax you’re looking at spending close to $850. The easiest way to drop that initial “ouch” factor is to wait a paycheck or two to buy those new games. If you buy the games first, you won’t have anything to play them on. If you buy the console first, at least you can play your old games on it until you can afford some new ones.

The answer to the next question is so obvious I feel silly for even rhetorically asking it, but if a console offers backwards compatibility, why don’t people just play their old games forever and never buy new games? The answer, of course, is that the new games are (or should be) better than the old ones! They should look better, sound better, and provide new features that old games didn’t offer! Here’s what Pac-Man looked like on the Atari 2600:

… here’s what it looked like on the Atari 5200:

So, the accepted life cycle might be as such: consumer buys a new console, justifying the purchase with the fact that they can play all their old games on it. Over time, the consumer eventually replaces their old game library with games for the new system as money allows, because the new games are better than the old games. The company’s original financial loss is made up over a couple of years of software sales, followed by several years of large profits, some of which are invested back into research and development for the next generation of consoles which will start the whole cycle all over again.

So, who got it right and who got it wrong this time around?

Nintendo got it right with the Nintendo Wii. Right out of the box, the Wii plays Nintendo GameCube games. In fact, the Wii has ports for GameCube controllers and slots for GameCube memory cards. Back to that “most” word — the Nintendo Wii plays “most” GameCube games. Win.

In a far second place is Microsoft’s Xbox 360. What they advertised was backwards compatibility. What they didn’t mention was that specific emulation software had to be coded for each and every title. These “emulators” can be downloaded from Xbox Live ($50/year subscription required) or can be downloaded one at a time from Microsoft’s website and burned on to a CD/DVD. It took a long time for the list to grow to what it is today. The list of Xbox games that can be played on the 360 hasn’t been updated on Microsoft’s site since 2007 so that should give you a pretty good idea as to how hard they’ve been working on getting more games to work. Xbox.com lists 462 original Xbox games that can be played on the 360. Wikipedia says there were approximately 950 Xbox games. Less than 50% is a far cry from “most”. And of those 462 games listed as being backwards compatible, somewhere between 1/3 and 1/2 of them have serious issues. Taken from the list:

Battle Engine Aquila: In Co-op severe graphic glitches make the game unplayable for the second player.

BMX XXX: All of the Acclaim demos movies and the Competitive Edge movie fail to run and just take the user back to the previous menu. All of the Scores videos will play in the game but will fail to play in the Movie menu.

Call of Cthulhu: Dark Corners of the Earth: Occasionally dialogue audio is replaced by loud static; Music does not play at all. Has quite a few bugs, including water not appearing at all in the game (doesn’t break anything by not being there). Still, it can be played to the end though some bugs will force you to replay sections of the game from an earlier save.

Trailing in third is the PlayStation 3. The original 60 gig PS3 not only played (most) PS2 games, but (most) PS1 games as well. Wikipedia lists 1,800 PS2 games and who knows how many PS1 games were released. This was a great way for gamers to justify the PS3’s hefty $600 price tag.

Unfortunately for one reason or another, Sony decided that backwards compatibility was not a feature worth keeping. Hardware backwards compatibility (putting a PS2 chip inside the PS3) was changed to software backwards compatibility (software emulation, which is not nearly as good). Eventually, PS2 backwards compatibility was simply dropped from the PS3. Along the way, other features have been dropped including USB ports, memory card slots, and WiFi. One of the neatest things (I thought) about the original PS3 is that you could load Linux on it and use it as a computer. No more; that feature’s officially been dropped too in the new slim units.

Sony’s official line is that some of those features cost too much to include. Really? Does it really cost Sony that much more to include four USB slots than two?

The leap between Game Boy, Game Boy Color and Game Boy Advance games are noticeable and stunning. By looking at screenshots I could tell you, with 100% accuracy, which platform each screenshot was from. That line’s not so clear between the last and current generations of games. Yes, the current generation supports hi-definition graphics, and to those with HD-capable televisions the difference is noticeable, but not everyone has their 360/PS3 hooked up to a high definition display.

I suspect, that both Sony and Microsoft got tired of waiting for consumers to make that natural transition on their own and have decided to nudge us (somewhat forcefully) in the “right” direction. Backwards compatibility was deemed important enough to include in all three current gen consoles, but apparently we got the old “bait-and-switch” business. Microsoft’s Xbox 360 promised us backwards compatibility before they had it and then didn’t fully deliver on their promise. Sony did the opposite by offering backwards compatibility up front and then slowly taking it away from future PS3 owners. Only Nintendo truly delivered what they promised. Isn’t it funny how the console that does backwards compatibility the best is the one that needs it the least? Rarely do I hear Wii owners talk about playing GameCube games.

Here’s what Sony’s Director of Marketing John Koller had to say about the lack of backwards compatibility on the new PS3:

“Now that we’re at a point where we’re three years into the lifecycle of the PS3, there are so many PS3 disc-based games that are available that we think — and noticed this from our research — that most consumers that are purchasing the PS3 cite PS3 games as a primary [reason]. And it’s not just like 50 or 60 percent. It’s well into the 80 or 90 percentile range who are purchasing it for PS3 [games]. We do know that there are next gen consumers wanting to come over the the PS3. Most of those are consumers who have not utilized their PS2 for a little while and they’re ready to jump into the PlayStation 3.”

Once again, I find myself in the outer 10%-20%. I can live with that. I suspect that people who own more than 20 gaming consoles and whose gaming habits aren’t affected in the least by backwards compatibility fall in that 10%-20% (probably more like 1%). Still, I think it’s pretty shoddy what they’ve done and I hope instead of making false promises next time around, game consoles simply admit the truth: “We lose money by supporting this feature and would rather not do it in the first place but it helps us sell consoles, so let’s just don’t and pretend we did.”