So BC wasn't a financial decision, but they actually chose not to include it for other reasons. Great job Sony.
http://www.engadget.com/2008/07/16/scea-ceo-jack-tretton-dishes/
PS3
On backwards compatibility: Jack explained that Sony looked at how to "not take a greater hit on production cost, without losing PlayStation's heritage ... Hardware / software for backwards compat wasn't all that expensive. ... but we're selling PS2 software to PS2 customers, and selling PS3 software to PS3 consumers." Still, Jack seems to feel like it may have been the wrong move. "I would like to have had it in there, but Sony's collective strategy determined we could afford to lose it. We've now gone down that road, and we're not going back."
On DRM and the video store: As of right now, Tretton is a firm supporter of the need to DRM content on the PlayStation platforms, and Sony believes that "the drm for a song maybe isn't as important for a movie and a game... this is way too hard a business to make money in to allow people to own multiple copies for the price of one." (That's what they all say!) "I'm all for allowing an individual consumer having the freedom to do with their content what they want," but Sony has no intention of opening its video up any more than it has to.
PSP
On drive or flash storage: Sony has "definitely thought about storage on the PSP," and understands the inevitable "march towards digital content delivery device." But in terms of a drive-based PSP, they have "nothing that's imminent." (Read: don't hold your breath.)
On how downloadable video affects the already sad state of UMD: UMD "has struggled, and it wasn't handled effectively from the beginning. ... I firmly believe in a digital model" as they're rolling out, but Sony is "still going to support UMD" as a device for movies.
What's preventing PSP software sales: Three things. Title ports from PS2 games (people don't want to buy the same title twice), and the PSP's media functions. But Jack put the most emphasis on "piracy in the hundreds of thousands of units are preventing software sales. it's a problem that affects our software sales right now."
Home
On what the crap is going on with it: Part of Home's issues thus far have stemmed from "the disconnect of when Sony took Home out of the creative minds and put it the hands of business minds... but I would rather ship it two years from now with a lot of good stuff, than open it as some ghost town. We have to do a good job of populating it." For the record, that doesn't mean Home is coming out in two years -- they just want to make sure to get it right. Of course, it could be argued that the entire concept behind Home is flawed. There, we said it.
Biz
On having Kaz, former head of SCEA, running PlayStation from Tokyo: It's been a favorable situation for Jack and the US team, because Kaz understands the US market and its needs better than Kutaragi did. "He understands the challenges... there's a better understanding for our business than there's ever been. Howard Stringer has also gotten involved in the PlayStation business."
Didn't Stringer get involved because PlayStation was hemohorraging cash? "Most of what we did before didn't have a lot to do with the rest of Sony's business... but we can no longer be an island off the coast of Sony Corp." Which is to say, this time PS3's launch touched many of Sony's businesses and interests across the company.
