Don't think it'll update graphics to current Gen stuff. It's just a Sim of a 360 (or emulator whichever you wish to use) that will allow you to play 360 games via xbox one, and use the 360 dashboard for matchmaking. My guess will be they won't restrict the ram, but will keep the graphics the same so it runs smoother than it did on the 360 console itself.
But, who knows, maybe they will up the graphic quality. We'll see soon enough.
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