Microsoft announced backward compatibility with Xbox 360 games for the Xbox One during their E3 2015 keynote, and now we have a better idea as to how that works. It turns out that when you play a compatible Xbox 360 game on your Xbox One, you'll be doing so in a full Xbox 360 emulator.
A Microsoft spokesperson told The Verge:
Behind the scenes, Microsoft has built a full Xbox 360 emulator for its Xbox One console. "Xbox One Backward Compatibility is an Xbox 360 emulator that runs on Xbox One and is used to play Xbox 360 games."
The feature is available today for Xbox Preview members, who can access 21 compatible games. Microsoft hopes to have over 100 titles ready to go when the feature launches for all Xbox One owners this holiday season.
Source: The Verge
