Microsoft confirms that its next-generation Xbox console, Project Scarlett, will be backward compatible with all Xbox generations. The company officially announced Project Scarlett, revealing some of the console's specs and its release window as part of its E3 2019 press conference.
In a press release, Microsoft explained that the power of Xbox Project Scarlett will mean that "Thousands of games across four console generations will look and play best on Project Scarlett." This sentence and the language used in the Project Scarlett announcement trailer, about still being able to play with friends on older games or older Xbox consoles, seem to confirm full backward compatibility. Microsoft may not have confirmed how many games on each of these consoles will be supported, or if it's all Xbox games, "thousands" would suggest that the company has most if not all bases covered.
Microsoft also didn't share much information about how this backward compatibility may work. On the Xbox One, players can purchase Xbox 360 games and download them to play on their console. If they own the disc of that backward compatible game, they can also put it into their Xbox One and download the backward compatible version. It's possible that Microsoft will keep this strategy with Project Scarlett.
What seems more likely, though, is that Microsoft will put more effort into streaming backward compatible games. At its E3 2019 press conference, Microsoft also announced the public preview for Project xCloud, its game streaming service which allows users to stream Xbox games to their mobile devices. The company has massively invested in game streaming and so it may want to use that as much as possible, which could include letting players stream all of these backward compatible games to their new Xbox consoles. For those who spent much of this console generation complaining about a lack of hard drive space, this feature would come in handy.
How backward compatibility works with Xbox Project Scarlett is just one of the many details Microsoft will have to discuss before launch. It has confirmed Halo: Infinite as a launch title for the next-generation Xbox console but the rest of the launch line-up and information about the console's pricing will have to be talked about too. Expect Microsoft to share more about backward compatibility and Project Scarlett's other uses over the next year.