Xbox One console to run old 360 games

Old Xbox 360 games will be playable on the newer Xbox One console, Microsoft has announced at the E3 games show.

It has developed technology that lets the older games run on the new console "natively".

Microsoft said Xbox One owners will not have to pay again to play the games that they already owned.

100 titles will be available to play when the feature launches at Christmas but "hundreds" more will be available soon after.

The titles will show up automatically in a player's games library when they became available, it said.

Mod making

Game footage from Halo 5: Guardians opened the Microsoft press event

The press conference also saw Bethesda Studios give some details about the version of Fallout 4 it is creating for the Microsoft's console.

Player-made add-ons, or mods, for the PC version of the game will be able to run on the Xbox One as well, said Todd Howard, game director at Bethesda.

Also announced was a version of Minecraft that has been revamped to run on Microsoft's augmented reality headset HoloLens. The new version turns the flat world into an interactive environment that can be explored in depth. Owners of the original game will be able to join in multiplayer Minecraft sessions seen via the HoloLens.

Microsoft bought Minecraft maker Mojang in October 2014 for $1.5bn (£1bn).

The press conference also saw Microsoft announce a partnership with game maker Valve on its virtual reality headset system. No details were given about what will emerge from the tie-up. The announcement comes only days after Microsoft revealed a deal with Oculus to use an Xbox controller as the navigation system in that VR system.

Piers Harding-Rolls, head of games at analysts IHS, said Microsoft's line-up was a clear " challenge" to Sony. It had developed features, functions and peripherals as well as a long list of exclusives that should make the Xbox One more appealing to gamers.

"There is also no doubt that Microsoft's strength of offering will help its position in the market against Sony's PS4," he said.

Analysis: Dave Lee at E3

These E3 press conferences are supposed to look to the future of games, with the big publishers laying out their blockbusters for the months and years ahead.

But in the Galen Center, which is usually reserved for basketball, the roars of approval were at their loudest when Xbox's Phil Spencer announced back compatibility with Xbox 360 titles.

It means for those gamers who have stacks of old Xbox games in a cupboard at home, they can place them into the Xbox One and a compatible version will download.

Two key things here. First, it's free. And second, it requires no work on the part of the developers.

It's more than just a feel-good dollop of nostalgia. As well as delighting Xbox One owners, the strategy here is to give another nudge for Xbox 360 owners to make that step up to Xbox One, rather than going for the PlayStation 4.

It also does a lot to reverse Xbox's image as a bogeyman when it comes to game ownership. It wasn't long ago when the company's policy was to hinder the sale and purchase of pre-owned titles, which angered many.

This is perhaps a necessary bit of generosity to keep passionate but principled gamers onside - and judging by the reaction here, it's worked.

Follow Dave Lee on Twitter @DaveLeeBBC

A free version of Fallout 3 will be included when people buy the new game, he said. Similarly, Rainbow Six Siege will ship with free copies of rainbow Six Vegas 1 and 2.

A trailer for Dark Souls III was aired during the Microsoft press conference

Microsoft also showed in-game footage of Halo 5: Guardians which is due to be released in late October this year. The story of the squad-based shooter involves players seeking to find the elite Master Chief soldier who has gone missing.

It said the multiplayer aspect of the game had been improved with the creation of a "warzone" feature that allows 24 gamers to play together against AI-controlled enemies on maps four times as big as those in earlier versions of the game.

The press conference also revealed the first in-game footage of Rise of the Tomb Raider, an game that is coming first to Xbox One game featuring Lara Croft that is due to be released in December 2015. Versions for other platforms will be released in 2016.

Games journalist Keza MacDonald said the line-up of titles and exclusives marked a big step for Microsoft and the Xbox.

"This, to me, is moving away from the image of Xbox as the safe option for all the biggest games, and toward a version of Xbox that has a creative identity," she wrote. "This was sorely needed."

Also announced were:

• Sea of Thieves (Rare)

• Fable Legends (Lionhead)

• Plants versus Zombies 2 (EA)

• Dark Souls III (From Software)

• Tom Clancy's: The Division (Ubisoft)

• Tacoma (Fullbright)

• Recore (Armature)

• Beyond Eyes (Tiger & Squid)

• Ashen (Aurora44)

• Forza Motorsport 6 (Turn 10 Studios)

• Gigantic (Motiga)

Microsoft is also introducing an early access programme for the Xbox One that will let owners try some games that are under development for free before they buy them. Five games - Elite Dangerous, Shelter, The Long Dark, DayZ and new title Ion - are all part of this initiative.

You can follow all of the BBC's coverage from E3 2015 via the hashtag, #e3bbc