If PS5 is not fully backwards compatible to PS4 then it's specifically by design to prohibit it.
That's not true at all. If they came out with the PS5 without doing anything to prohibit B/C, it still wouldn't run PS4 games.
I think rumors like this will probably hurt them in the long run. I've seen this and stories like it popping up all over, and the general excitement I keep seeing from people who don't understand how hard this would be makes me feel like not announcing PS1-4 Bc, would be a letdown and almost free marketing for MS, if they evolved their current system into true BC.
I just don't think Sony expected it to be that big of a deal, and all they've invested in is making PS4 purchases carry over. But, the last thing they want is to have their competition branding them anti consumer right out of the gate (we've see how that works before).
The only way it would hurt them is if it wasn't B/C with PS4. And really, even if it wasn't, that wouldn't lead to the death of the PS5. Just like having B/C didn't really do much for the XBO. Having B/C just makes it easier for PS4 owners to transition to next gen, especially if they are trading in their old PS4s to help pay for the PS5. Sony knows B/C isn't the end all be all considering they have been doing it a lot longer than MS has. PS4 was the only console of theirs not to feature it significantly, and it still is going to sell 115M+.
If PS5 will have BC then MS needs to find something else to boast about next gen hehe
In all seriousness, this is fantastic news. Maybe we'll stop getting all those "HD remasters" that arent even that old and doesn't deserve.
If the patent is anything to go on, it seems like they want to still do remasters, but through emulation. It talks about replacing assets, like textures, with improved ones. I think that would be a killer feature, and could be a great stream of extra revenue if publishers actually make use of it. Even if the emulator just does what the PS2 emulator does on the PS4, outputs in 1080p (maybe 4K this time) and smooths out textures and jaggies, it would make playing PS1 and PS2 games much easier on the eyes.