Also, keep in mind they sold off all their chip production facilities. Their pipeline for the GS and EE are no longer in Sony's hands which may have weighed in on the decision.

Well is hiring engineers to software emulate all PS1, PS2, and PSP games ......

Of course there will be a full, software based PS2 emulator for the PS3.

Might take 1-2 years but Sony is working on it. They already have all but Graphics Synthesizer running under emulation (80Gb model) so how hard can it be to add the GS?

What worries me is that they may decide to sell it through PSN to make some money. That will be as bad as Xbox forcing you to play to play 3rd party games online.

Or it was just a bad decision that Sony realized quickly after seeing poor sales that followed launch due to price point.

Excellent point. I didn't even think of that.

I thought Sony said software emulation was the plan. The hardware solution was late coming because they could not get it done in time (they still don’t completely have it done). Emulating the PS2 is a hard thing to do.

As for how could they get these new models out so fast, well, because they are Sony. The reason XBL kicks the crap out of Sony’s online offering, is because MS is a software company. That’s what they do. They do it far better than Sony. Sony makes hardware, and they are very good at it. It’s why the PS3, purely from a consumer electronics point of view is so great, it’s plays to Sony’s strengths. They know how to make devices that don’t fail, look good in a living room, and how to reduce costs with latter models. They were doing it long before there ever was a gaming console in anyone’s house. It’s what they do.

Sony released the PS3 WAY before they wanted to, and WAY before it was ready. I blame MS for this. MS’s strategy was to beat Sony to market. Fine, and it would have been brilliant of MS did it right, but they did it at the expense of the consumer. They released a box that has a 30% failure rate, and sounds like a jet engine in your living room. If MS would have taken the time to make their box right, they would have released it 6 months to a year later, and it would have worked better (better for all of us), and Sony would have had more time to make the PS3 what they wanted it to be in the first place (better for all of us).

MS knew they had inferior hardware, but also knew how bad it would shake up Sony if they did what they did. They hurt Sony at the expense of the consumer, and sorry, but I think that’s a crap move for any company.

So, my guess is the PS3 was going to be what the 40 gig is now, with total software BC. That was the plan from the start, imo.

@ rocketpig

I'm not completly understanding the BC hardware part.. are you saying BC hardware was included because of the backlash MS received from critics for only using software?

I see how that would make sense. Sony's biggest strength is its brandname and the millions of PS2 owners, last thing they would want is to piss them off, so they included the BC hardware. When they saw that PS2 users wheren't switching over to the PS3, they decided that maybe BC was overrated and took out the hardware to cut cost.

Correct me if I'm wrong

Not exactly. I meant that Sony always intended software emulation to handle the BC on the PS3 but didn't have time to get it up and running before launch so they included hardware to cover BC with the intention of later replacing it with software BC.

Whew, run-on sentence FTW... Hope that makes sense. 

I wander has the PS3 been released in Q4, then there would have been any fight left in the high-def. I think it was only cuz of the PS3 that the blu-ray manage to survive whole of the 2007 when the blu-ray standalone player sale was so lack luster and finally have come so close to the victory. Otherwise by Q4 of 2007 the high end disc game could have been well over for the blu-ray camp.

Just my .2 cents

if you remember the ps2 had ps1 hardware in it. they believed in hardware was the way to go. it was the easiest thing to remove as well, three fold gain for them, one saves money directly, two forces you to buy ps3 games, three, forces you to rebuy ps2 games from a virtual store (Ms is guilty of that part too, but the list of avalible games seems to match up with software emulation). if sony does release it ill be surprised it is no financial benefit to them, really it only buys them good will.