Microsoft’s Game Room is a cool virtual space on Xbox Live where you can hang out with your cartoon-like avatar and enjoy the games of yesteryear. Frank Pape, senior director of business development in the game division at Microsoft, took me for a ride down memory lane today as he showed me the games you can play in Game Room.

As Pape explains in the video below, Microsoft started working on this about 18 months ago when it figured out it could create an emulation technology that would let you play games from old consoles like the Atari 2600. There will be dozens of arcade games, from Centipede to Asteroids, available to play in their original format. The cool thing is that in particularly hard parts of the games, you will be able to rewind to the point where you screwed up and start over. That way, you don’t have to start at the very beginning. The Game Room launches on Xbox Live in March. Check out the demo from Pape.

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Microsoft’s Frank Pape talks about Game Room from Dean Takahashi on Vimeo.