The ATRAC versions are not really new formats (like MPEG 1 and MPEG 2) they are simply more refined circuits. They are also forward AND backward compatible. So, you can encode an MD on a ATRAC 4 machine and play it back on an ATRAC 1 machine. Sound quality got better with each version (ATRAC 1 was bad!)

Also, MD has been around longer than MP3 I believe (1992) and it is pretty invisible to most users. ATRAC does have digital copy protection, so I am guessing this was their main reason for using it.

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