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As to why Microsoft chosed to not rewrite the emulator I can just guess. I would think it was to much hassle to do properly, since they couldn't just use the 32bit emulator. And since there was an alternative with virtual machines which were there and working, they chose to cut the cost, development time, the testing time and the support costs. One may not like it, but all this is important for a company. And it is the same in most other businesses as well. You could still drive your very old car, but you won't get replacements for it any more from the manufacturer.
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