This is good for 2 reasons:

1)It gives people another way to get old games, not everyone has a Gamestop or EB Games near them. Also, many 360 owners did not own the original Xbox, so they may not have played many of these games.

2)It's one step closer to downloading current-gen games. If it works out well, we may see MS releasing a larger harddrive and allow full current gen games this generation.

^^^^^

1) I'm sure that you can find a GameStop or EB in the two hours it takes you to get to one that is not near you while you are downloading the game... Who are you kidding, Gamestop is one of the biggest companies around there. There are six gamestops within fifteen minutes of my house. And I live in the suburbs.

2.) Current gen downloads will not happen until terabytes of space are able to be used. Games Like Mass Effect, or Killzone will take up massive hard drive space to be downloaded. Not until huge hard drives are supported will we see this.

^^^

1) Countries outside the US don't have as accessible access to used or old games... Also, not all very small cities have them... Finally, I'm sure it is all about achievements. 500 for old XBox games maybe?

2) You have to start somewhere with larger downloads and this is a good place. By the time terrabyte drives are out they will have it down pat.

DMeister. Not everyone wants to drive 2 hours, waste $10 in gas (the cost of the game), just to find a game they can start downloading in 5 seconds from XBLM. Your really stupid to think otherwise. Downloading games is the future.

2. It'll happen. We can already do it with oh-so many PC games. Oblivion was available for download the day it came out on Steam. Why not do it for the X360? I mean, the X360s as of April have 120gb HDDs. That's enough for about 10 uber-sized games (and more likely, 20 games).

Given a year, we'll probably be seeing 250gb HDDs for the X360.

Again, downloading last-gen, or any-gen games is the most important aspect of the future economy of gaming. We've already seen the fact that on XBLA, even old games continue to sell well (Pinball FX was like #6 last week on the sales charts, despite the fact the game is about 6 months old).

It makes too much financial sence not to do, and Microsoft will make millions from this decision. Lets just hope Nintendo and Sony get on board too.

I always say more is better, gives you a choice. If you want to download these games or run out and buy a scratched up used copy of an older game. At least you have a choice. Downloading a game shouldn't take you all that long unless you have a really slow connection to the internet. When your done playing the game you can delete it and download it later if you want. So I think they should keep bringing older Xbox games, it can't hurt.

Best News Ever?

You're not exposed to much media are you :)

@ Neoratt

Has this been announced for all countries... Cause this'd be completly and utterly useless in Japan for instance.

@ Mrstickball

Obviously you did not note the sarcasm. There are gamestops all over america, I don't believe that many if not any peopole have to drive over thrity minutes to reach their local gamestop. Or if not, go to ebay. They're not going to charge you fifteen dollars for a six year old game (Halo). I think the people that can't make it to a gamestop are few and far between. While I don't believe in profiting a company by buying used games, it's better than getting gypped by a company by overcharging. games. Of course you can download PC games, you can expand memory to whatever you like with the use of external hard drives. How much do you think a 250 gig hard drive for the 360 would go for. $100 for 20 gigs... $180 for 120 gigs, what $200-250 for a 250 gig hard drive? You can get a 500 gig hard drive for your PC for 150-200 if you look hard. That doesn't make any sense, especially, unlike another system, you can't swap out the HD comes with for another larger HD since MS decided to screw us over with a propietary hard drive. I wouldn't download many XBOX games anyway, only a few were worth playing.

 iTunes is popular because it caters specifically to a media format where portability is not just seen as a convenience, but a must. A single CD is less portable than a media player that can hold 1000 CDs. 

Gametap and Steam are popular because they're on the PC format, where storage space is cheap enough to be irrelevant. HDD storage space is getting to the point where you can buy it for a quarter per gigabyte.

Both are popular because they offer a cheaper, more convenient alternative to physical media. An average CD on iTunes costs $10-$12, as opposed to $15-$17 for a CD at your local brick-and-mortar. A month of Gametap is much cheaper than it would cost you to buy all of the games that you're downloading.

Now consider this proposal from MS. The 360 isn't portable, so it's no problem to keep physical media around. Storage space on the 360 is at a premium, as the proprietary hard drives are pretty overpriced. And, even putting aside the (inflated) cost of the 120gb hard drive, the downloads themselves actually cost more than the average secondary market value for these games.

That leaves convenience as a benefit. And even then, is it so much trouble to take a 10 minute drive to your nearest Gamestop?

^^^^^ Exactly. Well Stated

Its good news... but its also sort of pointless if the 360 supports these games natively - i.e. you pick up a copy of Halo, and it just works.

Even if the Wii had the space - I wouldn't ever expect Ninty to extend the service to GC games. Apart from the fact that it couldn't actually work ;)
...

But yeah - digital distribution IS cool - and this is a feature that will make a lot of people happy. A lot of people have the "laziness" factor - just press a couple of buttons, and play a XBOX title you never have before.

This is one of the most significant announcements to hit the 360 in a long, long time. KOTOR? Jade Empire?

(not much point to play ANY game that has already had a 360 sequel/improvement released...)