As early as January, insider reports had suggested that Microsoft's next-generation console would support compatibility for existing Dreamcast software. Only weeks later, Sega would announce their departure from a first-party hardware developer, and their transition to a third-party software developer. Microsoft later debunked reports linking the XBox console to Dreamcast games.

Months after these incidents, it now seems that these rumors were at least partially true; The Microsoft XBox will be able to support a format other than their own. The format however, will not be that of the Sega Dreamcast, but of the PlayStation 2. We know what you're thinking. We are just as shocked as you are.

Although we have yet to receive official reports from Sony and Microsoft themselves, an insider close to Sony Computer Entertainment was able to pass the following information to us:

"Microsoft's XBox console will include a component inside that will allow XBox owners to play PlayStation 2 games. Basically, the two formats will be interchangeable. So players can play both XBox and PS2 software on the same console.

"I'm not exactly 100% sure how these plans came to be, but apparently a new deal may have been worked out by Sony and Microsoft behind closed doors. There was a demonstration of these compatibility options shown behind closed doors at the Tokyo Game Show. The XBox may even be able to enhance existing PS2 software by the time it's released in the Fall."

Could this really be an alliance between Sony and Microsoft? What does the future hold for the PlayStation 2? We will have more news on this as it becomes available.

Source: PSX2.com/news