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http://www.1up.com/do/newsStory?cId=3141472
Microsoft and Nvidia currently have a license agreement for Nvidia-related technologies for use in the Xbox 360, 1UP.com learned today, in order to achieve backwards compatibility with Xbox. The original Xbox was engineered with an Nvidia-developed GPU, whereas Xbox 360 utilizes a new ATI GPU, which has proven problematic in coming up with an easy solution for backwards compatibility.
Nvidia confirmed the existence of a licensing agreement for Nvidia-related technologies to 1UP.com, but would not enter into specifics. According to the agreement, Microsoft will make payments to Nvidia over several years. Unfortunately, Microsoft is keeping quiet on the subject. "We have no further announcements on backwards compatibility at this time," said an official Microsoft spokesperson.
Microsoft has been investigating the feasibility of backwards compatibility for around eight months now, said a source close to the project, and signed the deal with Nvidia about five months ago.
Last week, ATI European Developer Relations Manager Richard Huddy provided the first hint in an interview with Bit-Tech. "Emulating the CPU [of the original Xbox] isn't really a difficult task. They have three 3GHz cores, so emulating one 733MHz chip is pretty easy," he said. "The real bottlenecks in the emulation are GPU calls - calls made specifically by games to the Nvidia hardware in a certain way."
In order to overcome the problem of games calling upon chip specific features within the Nvidia hardware, Microsoft needed to emulate the Xbox's GPU. Without an official agreement with Nvidia, however, Microsoft would have to reverse engineer the technology, which would have been a "legal nightmare" for the company, said our source.