Backwards compatibility has had a weird history. The PS2 is probably the first “major” device to offer it, mostly being a thing sported by minor revisions of specific PC/console gaming systems like the PC Engine (and generally PC games have BC though each Windows version jump is a bit of a question mark).
Since Backwards Compatibility never really became a 100% expected feature of consoles, a lot of “no one even uses that” talk came out when it was announced the PS4 and Xbox One would completely lack any form of Backwards Compatibility–and in Sony/MS’s defense, the architecture mismatch is a pretty big deal so it’s not quite a minor deal.
However, at E3 2015 Microsoft announced they WOULD do backwards compatibility for 360 titles, much to the surprise of almost everyone. How they technically managed this isn’t really relevant to my point, but what they’ve done with it from a marketing standpoint is very interesting.
Rare Replay uses Xbox One BC to play several of it’s games–almost all of the 360 titles. Fallout 4 and Gears of War Ultimate Edition come with free copies of prior 360 games if you buy them early. Every BC title will not only be playable on Xbox one, but purchasable on Xbox One, meaning they’ll be earning direct revenue from this.
I don’t think this idea was ever entertained in the arguments about “no one” using BC. Since BC now means that a wider variety of low-cost, high quality titles can be sold digitally, at extremely low cost, BC is more relevant than ever. Additionally, BC could be a very strong reason to never shut down XBLA/PSN for 360/PS3 games–if you’re actively selling those games via BC or even services like PS Now you’re still earning money from them, even if players are using their Xbox Twos and PS5s, and suddenly the environment feels a lot more like Steam in that games new and old still bring in revenue and there’s no good reason to cull online services.
I’m very disappointed in how BC started this gen; it didn’t exist on PS4 and Xbox One, and Nintendo almost completely squandered the Wii U’s potential for BC by not allowing Gamecube games to be played (by hacking wii mode they actually can) and by taking forever to digitally distribute Wii titles (and only a handful at that). But with Xbox One’s style of offering it seems very apparent to me that Backwards Compatibility has a potentially strong future due to digital distribution and (presumably) an X86 focus for future consoles for Sony and Microsoft that should make future gens of BC both easier and more profitable than hardware & disk based BC ever was.