The Microsoft approach is very interesting. The games are not actually compatible, but are instead recompiled for the new machine with the compatibility library.
This means that they can work better, but code must be downloaded to the console for the game.
Dynamic recompilation of CPU code in emulation is a bit different because more of machine's state must be emulated, as the emulator is translating compiled machine code from one machine to another. The Microsoft approach requires the original source code and produces native machine code for the new machine, which means less work for emulator.
Microsoft required it in the developer license. They do not own the code but get a copy and can use it for purposes like this. I do not know for Sony but one of the license is here:
The Microsoft approach is very interesting. The games are not actually compatible, but are instead recompiled for the new machine with the compatibility library.
This means that they can work better, but code must be downloaded to the console for the game.
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Dynamic recompilation of CPU code in emulation is a bit different because more of machine's state must be emulated, as the emulator is translating compiled machine code from one machine to another. The Microsoft approach requires the original source code and produces native machine code for the new machine, which means less work for emulator.
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Microsoft required it in the developer license. They do not own the code but get a copy and can use it for purposes like this. I do not know for Sony but one of the license is here:
https://www.sec.gov/Archives/edgar/data/946581/000162828017005833/ex10-48.htm
That's very cool, imagine what we could do if only we had a public source code repository for every piece of software.