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Microsoft needs to realise that backwards compatability is more than just necessary, it's practically vital! That was one of Nintendo's mistakes with the gamecube although agreeably a multi-format system would cost a huge amount. Microsoft need to ensure backwards compatability is high on their list of things to include in the XBox's successor as it was an incredibly appealing feature of the PS2 over the original PlayStation.
It comes as no suprise it will be high spec though - We're talking about Microsoft here after all.
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