I suppose one of the big business advantages is that 100% BC will be a great tool to bind customer to a brand. In reality most people might not play their old games, but emotionally the thought that all the games you bought will work on the next console, might be a trigger to not switch over to the competition.
Another thing might be library size and game pricing. Just look at Steam, how many people haven't bought an old game just because it was cheap? Selling 360/one games for a couple of bucks could be a small gold mine if not changes to the games are required to run it.
I think that is microsofts plan with xcloud and game pass. You no longer have real generations because all your xbox games are always with you. Yes there will be games missing from the original xbox and xbox 360 and maybe even a few from the one but as we move forward new types of licensing will be done.
Its just like with TV a lot of old shows needed to renew the rights to songs and couldn't so you have generic songs instead. A big one was Married with Children. Watch it on tv or buy the dvds and it had the real music but stream it ? Nope. But now tv shows are being made with streaming in mind.
Microsoft is trying to build a huge library of content for gamers and I am sure they will start to pay other companies to put games on the service like neo geo or turbo graphics and the like. or they might buy a company with a big catalog like some of the rumors of Capcom and konami and sega. But this is the future we are going for
https://nypost.com/2019/09/16/netflix-buys-streaming-rights-for-seinfeld/
Look at the amount of money companies are paying for stream rights on tv shows. Netflix shelled out big to keep friends for an extra year before HBO MAX launched and now they are paying big for Seinfeld. Disney dropped 50B on fox for all of its content which will bolster hulu and Disney plus.
That is whats coming to consoles. Nintendo is in a good position having made content from the 80s with strong first party IP that has never really faded from the zetigist. Sony has a lot of good content also from the Mid 90s on ward. But MS is late to the game so its more crucial for them to build all this out. They know that Game pass ultimate becomes a much easier sell when its hey spend x amount of money , get access to hundreds of games across generation and also be able to purchase new games. Oh and if you buy it on xbox you can play it on your console , on your windows device or android or ios device. So why buy Destiny 3 on a p5 and only play it on ps5 or on a switch and only play it there and stadia ? Why buy it and only be able to stream it if you have a better box to play it with at home.
I look forward to what MS is doing because lets face it 3D games have aged badly. You take a game like Super Mario brothers and yes it doesn't look as good as cup head. But it still easy to pick up and easy to understand. Super Nintendo is more of the same. But pick up some early 3D games like Golden Eye or Resident evil or Tomb raider and yikes that are a mess. Even fast forwarding in time to the xbox 360 generation and its still rough. If MS has invested in BC where I can play those games in 4k with modern filtering modes and FSAA then yea I will go back and play a lot. If they are able to fix frame rate issues or even offer 8k options for when 8k tvs become affordable. That is the future.
I hope Sony and Nintendo are also on board for that future. The rumors of remakes for all the 3D marios sound great. But are they going to keep doing that every generation to keep them looking better or will we get a remake and then wait generations for them to look at them again ? For generations before they come to another Nintendo platform?
Anyway that's my rant.