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Backward compatibility with the Xbox 360 is one of the big ways Microsoft is trying to set the Xbox One apart from the competition, and it is already making a difference at retail.

While Sony proudly announced that the PlayStation 4 led July in terms of software sales (according to industry-tracking firm The NPD Group), it turns out that the Xbox One wasn’t No. 2 like you would expect. Instead, it was Microsoft’s older Xbox 360 platform was second in game sales in July.

Now, you could see this as the Xbox One falling behind its predecessor in the $13 billion U.S. gaming market, but both PS4 and Xbox One had a dearth of interesting new releases (Rory Mcilroy PGA Tour was the only triple-A release). In light of this, it’s possible this was just one negative aberration for the Xbox One.

But NPD analyst Liam Callahan has a different theory. He suggests that Xbox One didn’t perform poorly and that Xbox 360 games were abnormally strong and for a good reason.


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“On a unit basis, 360 was the second-highest selling platform for new physical software sales after the PS4,” Callahan said in a comment provided to GamesBeat. “Besides [that] this was a light month for launches that typically favor [the new] platforms, one reason for the stronger 360 sales may have been the news of backward compatibility for the Xbox One coming out of E3.”

July was the first full month after Microsoft announced it was bringing Xbox 360 backward compatibility to the Xbox One. That feature is currently in beta, and it works for people who are in the Xbox One Preview Program. It goes live for everyone else in November with more than 100 compatible games. Microsoft plans to add more 360 games to the Xbox One library each month after that.

For now, this means that some Xbox One owners are potentially going to retail to pick up some Xbox 360 releases to enjoy on their newer hardware. At the same time, Xbox 360 owners who are preparing to make the leap to the Xbox One in the near future might also feel better about buying games for their aging consoles.

“Consumers may have felt safer buying 360 games knowing that they will be able to play them on Xbox One if they choose to upgrade,” said Callahan.

We’ve reached out to Microsoft for a comment on this, and we’ll update this story with any new information.

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