Final answer:
Newer consoles being compatible means they can play both games from older consoles and new games. This backward compatibility helps consumers transition to new consoles without losing access to their existing game library.
Step-by-step explanation:
When companies make newer consoles compatible, it means that the new consoles can play the games made for the older consoles in addition to new games. This concept is similar to software version compatibility, where newer versions of software, like Microsoft Windows, can open and read files created by older versions, but not necessarily vice versa. This backward compatibility is designed to ease the transition for consumers, allowing them to access their existing library of games even as they upgrade to the latest console hardware.