Age of Empires 1 + Windows 7 SP1 = "Could not initialize graphics system. Make sure that your video card and driver are compatible with DirectDraw""

I installed Age of Empires I on Windows 7 SP1 x64 Ultimate. After the installation whenever I tried to run the game (Empires.exe) I get the following error right at the beginning:

Could not initialize graphics system. Make sure that your video card and driver are compatible with DirectDraw.

I tried to change the compatibility mode and run as administrator but it didn't help:

I followed the instructions printed on DirectDraw or Direct3D option is unavailable but it didn't work (and they went written for Windows XP, not Windows 7).

In dxdiag I checked that all my displays have DirectDraw enabled:

I tried to change the monitor's resolution to 800x600 (which is the default resolution of Age of Empires I):

What else can I try to solve the issue (without having to run Age of Empires 1 on a different OS, and without having to buy anything else as I have already bought the CD over 15 years ago)?

Note that Age of Empires I does work fine with Windows 7 SP1 in a virtual machine, so I guess it might be due to some conflict with my graphic card's drivers (NVIDIA GeForce GTX660M).

I would say it's your drivers. I had the same problem as you. I had to reload Windows and didn't update the video drivers to the latest and the game is working. Sims3 is also working for me now.

Right click on game shortcut-->properties-->compatibility, and tick the checkbox saying " run in 640X480 resolution ". On windows 10, there's an additional option: a checkbox saying "use reduced color mode" tick that too and select 16-bit. That worked on my PC. I'm using a 64-bit i3-5th Gen, with intel HD graphics 5500.