The Switch 2 features backward compatibility with original Switch games, but it's not a direct 1:1 hardware compatibility like some past Nintendo consoles. Instead, it uses a hybrid approach that's somewhere in between a software emulator and hardware compatibility.

Basically this is a translation layer, similar to how Xbox titles are backwards compatible with older systems or Steam Deck's Proton runs Windows games on Linux or. It is a JIT (Just In Time) compilation that translates the Switch code on the fly so it can run directly on Switch 2.

https://www.youtube.com/watch?v=M3T6vw7p2S0

There has been some confusion about how backward compatibility will work this time around, especially regarding whether existing games will see a performance boost on the new system. Here's a breakdown of how it's understood to work:

Translation on the Fly: The core of the backward compatibility lies in the Switch 2's ability to translate Switch game data in real-time as it's read. This is necessary because while both consoles use the similar architecture, the executable code from the original Switch is not directly compatible with the Switch 2. This process is more akin to a "compatibility layer" than a full software emulator, which would be more demanding on battery life. There's partial hardware compatibility with the game code, with the rest handled through this translation or compatibility layer.

Performance Improvements: Many original Switch games are expected to see improved performance on the Switch 2. This can include faster loading times, more stable frame rates, and potentially higher resolutions for games that used dynamic resolution scaling.

Physical and Digital Compatibility: The Switch 2 will accept physical Switch game cartridges, and you'll be able to transfer your digital Switch game library over.

Switch 2 Edition Games and Upgrades: Some games may receive "Switch 2 Edition" versions, which will be full-priced releases that take full advantage of the new hardware. For those who already own the original, there might be a lower-cost upgrade fee. Some games will also receive free updates to improve performance on the Switch 2.

Compatibility List: Because it's not perfect hardware compatibility, not all Switch games are guaranteed to work. Nintendo maintains a compatibility list, and it's constantly being updated as they test the vast library of Switch games.
https://www.nintendo.com/us/gaming-systems/switch-2/transfer-guide/compatible-games/

Joy-Con Compatibility: While most Switch games will work, some games that rely on specific features of the original Joy-Cons (like the IR Motion Camera or fitting into accessories like the Ring-Con or Labo kits) may require you to use original Switch Joy-Cons connected wirelessly. The new Joy-Con 2 controllers may not have these specific features.

Incompatible Games/Apps: A small number of games and apps are confirmed not to work on the Switch 2. For example, Nintendo Labo Toy-Con 04: VR Kit is incompatible because the Switch 2 tablet is larger and cannot be inserted into the VR goggles. Some streaming services may also be affected.

In essence, Nintendo has put significant effort into ensuring that the majority of the existing Switch library will be playable on the Switch 2, providing a seamless transition for players. However, it's a more complex technical solution than simply including the old console's hardware.

Seems only like 5 games I own have some issues. Not a big deal.

Xbox's backwards compatibility is much more complicated.

The Xbox One actually included hardware support for some Xbox 360 stuff like texture and audio formats.
However they recompiled the entire Xbox 360 software environment, OS, API's, Drivers, the lot and virtualized it.
They also repackaged the games, they take the PowerPC code, reverse engineered it into an intermediate, then emulate for x86.

Basically Microsoft did a hybrid approach. They have emulation, they have virtualization, they have partial hardware support, they recompiled and they used a translation layer to achieve backwards compatibility.

Nintendo isn't doing the same approach here, there isn't any need, they are relying on the fact that the hardware and software is an evolution rather than a clean slate.

The first few days of owning the Switch 2 basically just switching between different Switch games to look at the minute differences and see how they perform.

Honestly, stuff like Xenoblade, Mario & Luigi and Hyrule Warriors AoC are my biggest hope for improvements there

It still makes me wonder why Nintendo went with emulation at all.

I mean, it's still an ARM V8.x CPU and NVidia GPU, I don't see why they felt they needed to do that?

The CPU's are binary compatible as the A78AE is an evolutionary superset of prior instructions sets using ARM.
The GPU is where things deviate significantly.

Maxwell is grouped with Fermi and Pascal in terms of architecture and has more or less the same kinds of instruction sets.

Ampere on the other hand is related to the Volta and Turing GPU's which has significant deviations from Maxwell in terms of instruction sets... And that is where the issue lays and potentially breaks compatibility. - Myself and Fatslob did allude the forum to this issue back when the Switch launched that this issue may present itself with Nintendo's successor... That just because it still uses nVidia's chips, doesn't mean 100% compatibility is guaranteed.

Now Xbox and to a degree Playstation have resolved these issues by having a stronger software layer to make hardware nuances less of an issue to drive compatibility across generations, as RDNA and GCN share the same "break" as Maxwell and Ampere. - But Nintendo hasn't gone down that path yet.

With the Switch 2 OS being chunkier, I am hoping they have forward planned this for next generation.

For me...I already got it planned out what I'll be playing.

MK World and the first switch 1 game will be Super Mario Sunshine, perfect for the summer lol

@OT - I'm hoping this helps b/c going forward.

Ah okay, I thought Ampere's instruction set would only be an extension of the one in Maxwell, not such a huge change. Okay, that makes sense, thanks for the clarification.

I still can't believe how dumb Microsoft was to not include any backwards compatibility for the first few years of Xbox One.

They could've undercut Sony by saying "PS4 has no backwards compatibility. We want you to be able to play many of your digital and physical Xbox 360 titles as you move on to Xbox One."

Now backwards compatibility is often oversold by some people. It's pro-consumer and convenient, but usually not a big selling point. But it would've absolutely helped Xbox as a whole earlier than later, especially if Kinect wasn't forced with Xbox One in the package and Xbox One was the same price as PS4. 

Xbox One's backwards compatibility required a ton of software engineering and resources... They couldn't just brute force backwards compatibility like you would get on PC as the Jaguar CPU cores were comparatively garbage... Keep in mind that Xenon could use 40-bit floating point extended math, Jaguar was limited to 32-bit or 64-bit, so down-sampling 40-bit to 32-bit would cause all sorts of precision issues especially dealing with things like collision detection... And upsampling to 64-bit was slow and a waste of resources.
So Microsoft had to get clever with how they approached it, hence the hybrid approach of recompiling code, repackaging, native hardware support, emulation, virtualization and more to make it work.

...Microsoft obviously had plans for Xbox 360 backwards compatibility on Xbox One while they were designing the console due to having hardware support for Xbox 360 texture and audio formats in hardware natively, rather than just using an off-the-shelf Radeon GCN part... So I would hazard a guess that the delayed rollout was trying to get the best performance and compatibility they could on the Xbox One's anemic hardware before they announced it, takes time to build this stuff unfortunately.

Honestly, I was always impressed with what Microsoft managed to achieve on Xbox One in terms of backwards compatibility... Many new games got a new-lease on life with the Xbox One X enhancements as well, some resulting in the best/definitive versions of those games being 4k, 60fps with better texture filtering.

The Achilles heel was always the licensing though, the Xbox 360 ironically has better backwards compatibility in terms of number of games for OG Xbox titles... And there are many amazing Xbox 360 games that are stuck on the Xbox 360... Which is unfortunate.

Thankfully in 2025 backwards compatibility is now an expectation.