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Pow! Take that, PS4 owners! The Xbox One finally gave fans something to shout about when, at the E3 gaming expo in June, Microsoft announced plans for the best kind of retro gaming - Xbox 360 backwards compatibility on Xbox One.

It means that, while Sony is making us pay to stream old games on PS4 through PlayStation Now, Xbox fans will see the likes of Banjo-Kazooie, Perfect Dark and Mass Effect return to their screens - free of charge. Here's everything you need to know...

So what exactly is backwards compatibility and when's it coming?

  • Applying to both downloaded games and physical releases, Xbox 360 games will run natively – i.e. without any extra hardware - on the current-generation system. And even better, players will have access to the Xbox One's coolest features, such as screenshots and broadcasting.
  • Backwards compatibility will be completely free of charge, with a Microsoft representative telling E3 attendees that the company "won't charge you to play the games you already own".
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  • You don't even need a Gold membership, although you will need to go Gold to play online multiplayer.
  • Xbox 360 backwards compatibility is currently being tested by Preview Members, ahead of its full Xbox One debut as part of November's update. This will include a redesigned Home page with a faster interface, providing quicker access to recently used games and apps.

    But how exactly does it work?

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  • It's actually very simple. Microsoft has essentially built an Xbox 360 emulator within the Xbox One, so you don't even need to be online to run those old games.
  • With physical games, players simply insert the disc into the Xbox One and then download it to the hard drive. You will, however, need to keep the disc inserted if you want to continue playing.
  • As for any digital titles you originally downloaded for your Xbox 360, these will automatically show up as "ready to install" in the My Games section of the Xbox One's dashboard. Just download the game(s) you want to play and enjoy.
  • Furthermore, the latest Xbox 360 update gives users a cloud storage increase from 512 MB to 2GB to transfer saves. It'll also flag which games are playable on Xbox One too.

    Will I still be able to play multiplayer?

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  • Absolutely. Both single and multiplayer games and modes will be supported on Xbox One, as well as downloadable content including maps and skins.
  • In fact, it even supports cross-platform functionality, which means you can play Gears of War multiplayer on Xbox One against another player on Xbox 360.

    Will I be able to use my old gadgets like Kinect?

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  • Unfortunately, you won't be able to use peripherals like Kinect, which rules out games like Kinect Star Wars from ever making an appearance - although maybe that's a good thing.
  • Certain limitations will be in place for other titles, like the inability to capture screenshots and video on Borderlands due to licensing issues.

    Will it support every Xbox 360 game?

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  • Not exactly. Over 100 games will be available when the feature launches in November, and new games will be added to the service every month.
  • As part of the latest Xbox 360 update, users will be able to see which games are compatible on both devices, which definitely makes life easier.
  • You can, however, request which Xbox 360 games you want on the console - with Black Ops 2 and Red Dead Redemption currently leading the pack.
  • Skyrim, Call of Duty: Modern Warfare 2, Halo Reach, Black Ops, Gears of War 3, Fallout 3, Modern Warfare and Call of Duty: World at War also appear in the top ten.

    Which games have been confirmed so far?

  • The current list of compatible games in full:

    - A Kingdom for Keflings
    - A World of Keflings
    - Alien Hominid HD
    - Banjo-Kazooie
    - Banjo-Tooie
    - BattleBlock Theater
    - Defense Grid
    - Gears of War
    - Geometry Wars Evolved
    - Hexic HD
    - Jetpac Refuelled
    - Kameo
    - Mass Effect
    - N+
    - Perfect Dark
    - Perfect Dark Zero
    - Shadow Complex
    - Small Arms
    - Super Meat Boy
    - Toy Soldiers
    - Toy Soldiers: Cold War
    - Viva Piñata
    - Viva Piñata: TIP
    - Zuma

    What else is coming?

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  • The entire Gears of War series has been confirmed - the original, 2, 3 and Judgement - while Microsoft has announced Bandai Namco, Bethesda, Deep Silver, Disney, EA, Sega, Square Enix, 2K, Capcom, Ubisoft, Codemasters and Warner Bros as supporting partners.
  • Though not officially confirmed, the following games were listed during a backwards compatibility presentation at gamescom (via IGN):

    - Alan Wake
    - Assassin's Creed Brotherhood
    - Assassin's Creed II
    - Bayonetta
    - BioShock
    - BioShock Infinite
    - Brothers In Arms: Hell's Highway
    - Cars
    - Child of Eden
    - Civilization Revolution
    - Dark Souls
    - Dead Space
    - Disney Universe
    - Endwar
    - Fable 2
    - Fallout 3
    - Far Cry 2
    - Far Cry 3
    - Risen
    - Risen 2
    - Trials

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  • Monthly Games with Gold freebies will also be compatible with Xbox One, which essentially doubles the number of free games Gold members will receive each month.
  • Furthermore, Electronic Arts is thinking of adding Xbox 360 games to its EA Access subscription service.

    What about the original Xbox, will that be supported?

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  • Microsoft certainly isn't ruling it out. Xbox boss Phil Spencer said that while the company was focusing its efforts on Xbox 360 backwards compatibility, questions have been asked about making original Xbox games compatible.
  • It'll probably take a while, but it would open up the possibility of being able to play games like Project Gotham Racing, Panzer Dragoon Orta, Shenmue 2, Steel Battalion and Ninja Gaiden on your Xbox One. Let's wait and see!