I believe that Sony removed ps2 support from the ps3 in order to keep the ps2 selling. Even this past year, ps2 has had first release in several countries, and from history, any time a console has been released that is capable of backwards compatibility (BC), it has killed the previous console. Specifically when talking about the ps3, which for quite some time had been a huge profit loss, why should they kill a console that makes profit by replacing it with one that doesn't? Any educated consumer would see the value in buying the newer console over the older one.

Now then, Sony removed ps2 hardware from the ps3 that ran the games, but it could be very much viable as a simple software emulation.

Now that the ps3 has been cracked, we will start seeing all kinds of third party apps appearing, so the big question is, "how is Sony going to cope with this".

Obviously, the correct answer should be to ride the wave. They need to reintegrate Linux, since its removal was simply due to Geohots original workaround. Now that it's cracked, re-update to allow for Linux, and use it as a sales point.

IF the ps3 is capable of software emulation for ps2 games, Sony needs to patch and release immediately. They need to capitalize on it to ensure that ps2 games will be bought rather than pirated, and use it as a selling point again. It will probably eat up a bit of ps2 sales, but it will in turn increase ps3 sales, ps3 game sales, and ps2 game sales.

Anyway, my prediction is:

PS2 emulation on ps3, and Linux within 6 months.

I don't really think Sony can make a PS2 emulator run on the PS3  due to the really strange hardware of the former. But yeah, I also wondered about it, it would be a good move in order to lessen hlmebrew interest.

And while PS3 emulation has been impossible, there is talks about porting the Dolphin to the PS3. If the PS3 get a Wii emulator running faster than the Wii itself... Jesus.

the crack already found a ps2 software emulator but from what i read it ran really poorly.  i'd guess not releasing it was less about keeping the ps2 hardware sales up and more about the product being crappy.  the hackers might be able to perfect it but at this point...who really cares.  with GoW collection and ICO/SofC collection and Sly Cooper Collection already way better than their ps2 counterparts what's the point?

There's actually a hardware issue with emulating the PS2...

I honestly don't think it matters at this point. Sony can do whatever they want. With the exploits that have been found, people are going to be pirating PS2/PS3 games regardless...and there isn't a thing Sony can do about it.

For those anticipating a homebrew PS2 emulation soon, I think they will be disappointed. I just don't see it coming. If our modern generation are barely keeping up with PS2 emulation, how does the PS3 be able to do it? All PS3 BC are achieved via hardware or a combi of hardware and software. Correct me if I am wrong. 

On the other side, it will be a really brilliant move for Sony to ride the wave. Give back Linux and make PS3 into a better sandbox. Since its already so open what difference will it make? Concentrate on eliminating those running pirated copies off PSN if possible. 

Unfortunately Sony isn't exactly the brightest lightbulb on the ceiling. The chances that they'll realize this and capitalize on it is probably fairly low.

it's not about stopping the hacks/pirates/homebrewers perpride. 

It's about getting in on the action. I don't think you fully understood the OP. I'm not giving ways for Sony to stop hackers, I'm giving ways for Sony to be BETTER than the hackers, which as consequence, would curtail hacking. It's not about stopping hackers, it's about stopping hackers as a consequence of improving the system.

I agree with you totally. Sony has been notorious of making wrong decisions over the years, hopefully they will make it right this time. 

If they concentrate on wreaking the homebrew scene, the hackers will probably scramble and get it back up in a few days. If they concentrate solely on banning/bricking consoles for running downloaded copies, the majority of the hackers will not be interested to get that feature back up.