Back in September, at a Microsoft company meeting, cloud-based games streaming was demonstrated using a copy of Halo 4, which was seen running on a PC and a Windows Phone with attached Xbox 360 controller. Albert Penello, lead planner on Xbox One, Xbox 360 and Kinect, said the technology is simultaneously "really cool and really problematic" to pull off.

"It's really cool and really problematic, all at the same time, insofar as it's really super cool if you happen to have the world's most awesome internet connection," Penello told Polygon. "It works way better than you'd expect it to. So managing quality of service, the tolerance people will have for it being crappy. Can you imagine, in this day and age, with the bad information around, and we can't control the quality of that experience and make sure it's good, or have to tell people they can't do it?"

Penello went on to say this specific demonstration was "a grand experiment" but it's all a matter of improving the Xbox Live network before going forward with any kind of feature launch. Penello also didn't rule out the possibility of streaming Xbox One games. "I know we did a lot of work behind it, and we said this is one of the things where the network just has to get better before we can do it. When that happens, you're going to have a really interesting conversation around that, can I actually run Xbox One games that way as well."

While backwards compatibility is clearly on Microsoft's mind now, that wasn't always the case. When the Xbox One was announced back in May, it was originally going to do away with backwards compatibility entirely. Don Mattrick, who was Xbox head honcho at the time, then famously said, "If you're backwards compatible, you're really backwards." Mattrick wasn't at Microsoft much longer after that, taking over as CEO of Zynga just a few weeks later.

This article was originally published on Joystiq.