From a technical standpoint, the PS5 is more then powerful enough to properly emulate PS1, PS2, PS3 (going by RPCS3) and is architecturally extremely compatible with the PS4. The only reason the PS4 might be an issue is that the PS5 will probably use a newer version of FreeBSD (and thus newer, incompatible software libraries). But there are multiple software container platforms that can package the older PS4 libraries for the games to interface with.

Will Sony do this? I somewhat doubt this, and not because they really want you to buy these games again. Veryfying the massive library from the PS1 -> PS4 might simply be impossible and there is always the possability some strange edge case game won't run or will do so poorly. Sony probably doesn't want people to experience a bad case of emulation.

A solution might be something like Steam Play and Proton, where Windows games can run on Linux. Normally, you can only run games verified by Valve to work on Linux. But you can quite easily by searching a menu turn on Proton for ALL Windows games (of course not all games run perfectly on Proton). Sourcing emulators is always a legal minefield, but since Sony build the consoles being emulated, they could work with existing emulators to make their games run.

Thoughts?

Would love it, but its not going to happen. I think the only reason we got PS4 BC is Sony panicking because of MS. It would cut into their PSNow profits too much.

It would be a good PR moves for longtime fans who own a lot of PS games from previous consoles. I don't think everyone is just going to go bargain hunting old games because they're BC.

Is it BC with PS4? Wow, that is neat

I've read a theory that the Tempest Engine could emulate PS2/PS3 backwards compatibility. Didn't Cerny mention the Tempest Engine could do more than just audio? I don't know how plausible it is though.

But just imagine, an all digital PS5 at $399 with PS4 BC, Blu - Ray PS5 at $499 with BC for PS2/PS3/PS4. Would be pretty crazy lol.

The only reason why BC went away is because it wasn't feasible for PS4 to emulate PS3. PS2 BC was removed from PS3 because their solution (including the PS2's Emotion Engine inside every console) was too expensive and easily the first thing to cut when sony realised things weren't going to work at $599.

When ever its made sense console makers across the board have always opted for BC. The benefit of remasters has never outpaced the benefit of transferring your audience over to a new platform. Digital services like PS Now will always be driven by modern experiences.

Well they should come up with a better solution then. The Wii was fully BC with the GC and that console was 250 bucks.

because it was two gamecubes stuck together ;)

It's not just the power and capabilities, you also need to license IP (for example, IBM owns the Cell processor from the PS3). In any case, from Sony's point of view it's all about selling new hardware and new games, and you have to see backward compatibility in that light.

So, if you want to play PS2, you are a Retro gamer, and you'll be one Ebay. Or you'll be buying your games one at a time through some equivalent of the Virtual Console App Store. Retro collecting is a pretty cool hobby anyway...

Fair enough, but the WiiU was fully BC with the Wii for 300 bucks. It can be done. Its just not good business.