But, they don't make money off of the PS2 console, Sony makes money from PS2 games. How would eliminating backwards compatibility for the PS3 help sony sell more PS2 games? It wouldn't.

Do you think they'll really achieve the exact same percentage as hardware BC? As long as they don't just give up like Microsoft did, I think they can do a lot. What were they when software BC started, like mid 70%'s?

They don't make money off the console? How do you figure? And if they can make people continue to buy the PS2 it could convince developers to keep making crappy games for it for several more years. Maddens and movie licenses alone could make Sony a decent wad of cash.

I am not saying that they don't make a few dollars from the console itself, but I think that the majority of the money made is from software, not hardware. 

It will just be another disgusting-yet-unexpected move from Sony if it's true. I can't see why in a million years they'd completely remove software compatibility -- the small cost savings of shaving software emu cannot be worth it. BC is something people consistently want (why, I don't know). It will really be a shame if it's true.

This could all be a misunderstanding though.

I've been fairly out of it for a few days so forgive me for missing this, but why did the rumor (assuming it's still a rumor) that Sony is taking out BC? Is it only because they lowered the price and people are figuring something has to go?

I believe it is because the source we are using to corroborate the rumor is maintaining that there is a lost of BC, but I could be wrong.

@twesterm, supposedly the rumor is that this new 40g PS3 won't have the software, nor hardware emulation. I'm trying to reason with them but it just ain't working.

Dallas...this thread is not about whether it is true...it is a discussion about IF IT IS true, what are the implications. So this discussion will continue whether there is any factual basis for it not being included.

From OP: "This thread is just to discuss what the implications of removing backward compatibility in any sku of the PS3 would be."

I think that it would be wise to consider the likelyhood of the removal of the BC before assuming that it isn't there. Either way, I respect your opinion.