Yup, the PS2 was PS1 BC. The innovation -> imitation -> saturation loop is in effect though.

Take online gameplay on consoles, for example:

Innovation: Microsoft had it first 

Imitation: Sony + Nintendo said they would try to add it

Saturation: Now all three consoles this gen are online (and expect to be online) 

I think BC was a pretty big contribution by Sony:

Innovation: PS2 is backwards compatible!

Imitation: Nintendo adds GC support to Wii.

Wait, wut?: Microsoft...um...emulates some XBox support on the X360. Sony adds PS2 compatibility to the PS3,  then removes hardware BC, then removes all BC from one of their models (which will be the standard model in Europe)

Saturation?: Wii is fully BC, X360 is...well somewhat BC. PS3 is BC (depending on which model you pick.)

I wonder if they'll try to maintain BC next gen, or will they simply drop it? Emulation will get harder to do, and a significant change in hardware makes BC expensive. Hmmm....

No BC = No ps3 for me, ever... not even at 150$ or 100$

i thought it was a bigger deal, but of the 60+ PS2 games i've ever owned i only have 8 left. of those the last one i played was god of war II, and that was when it came out. overall, i hope they can find a way to reimplement BC.

good write up chadius, btw...

Ahh. Good to be an early adopter. I still say that taking it out isn't that bad...it's just bad for people that want to play PS2 and PS3 games on the same system. If you want to play PS3, buy a PS3....want to play PS2, buy a PS2....want to play both? Buy the PS3 that's 100 dollars more, or buy the cheap PS3 and a hundred dollar PS2.

Man...I just looked on Ebay for PS2s.....i worked at a flea market game shop for a while, like 2 years, and my boss sold refurbished PS2s for 100 bucks....fixed mine on one occasion....but the ones on ebay can get up to 400 bucks...

You can buy a used PS2 very cheap so I don't see it as a deal breaker.

 for some people its about the space it takes up, the inputs takes up on your TV, and wanting to get the higher quality output of the PS3.  So for a lot of people it can be a deal breaker, I realise you are just stating your opinion but I am just stating the other side of it.

For the hardcore gamers, pretty damn important. For casuals I dont think a lot care. Most people will buy the system for the 1-3 games they buy every year(Sports games, and "Big" titles ie FF)

Here I though the Dreamcast had it first...  Yeah, it was an add-on, but it was console online play.  Even if we ignore this, the PS2 supported it and it came out before the XBox.  I'd say the 6th gen was pretty close to saturation (besides Nintendo.)

Actually it was the Super Nintendo and Genesis with the X-Band accesory. you had to pay a monthly fee for it as well just like Live.