@SpeedBreaker:

Actually, if you look at the studio support, Blu-ray exclusives are the Sony studios, Disney, Fox and Lionsgate. HD-DVD exclusives are Paramount, Universal, Dreamworks, and Weinstein Company/Dimension (and most porn studios). New Line is not exclusive to Blu-ray, but it is true that their HD-DVD releases of new movies may be later than Blu-ray due to lack of region coding.

Actually, I have started buying Gamecube games because my Wii can play them. I love Donkey Konga ... missed it on the first go-round ...

And I would prefer to have fewer consoles in my Man Space, and BC is very, very important to me, as well as other gamers. If Sony was going to do this, then why tease us? They should have said they were going into a new direction from the start instead of confusing folks with tons of SKUs and PS3s missing features that Sony had less than a year ago touted as *core values.* 

Backwards compatibility is first and foremost about customer retention. Secondly it is about customer satisfaction. Being able to transfer your intellectual properties as hardware improves over time is no less significant then the development of interchangeable parts. Thats the value of having a continuous platform. Consumers actually invest in your new system by having bought software for the previous one. The more software they purchase the more reason they have to stick with the brand. The net result is that you retain customers, and you have an advantage over your competitors.

Consumers are savvy, and they value their investments. Software is an investment on the part of consumers. How willing are you to throw money away. How willing are you to throw hundreds or thousands of dollars away. Thats what happens when a format is abandoned. People have a lot of old stuff they no longer have access to. This is why VCRs still sell in large part, and why DVD adoption was so agonizingly slow. Even if the consumer rarely uses the item. They will not be happy about having their property taken away. No means to use the format effectively means you lost your property almost as if it were stolen.

Backwards compatibility makes great business sense, and further more the videogame industry was one of the first to demonstrate this. Yeah I know blind brand loyalty will make the apologists frame it as a intelligent move. The reality is that it is very dumb. However I agree that it was the right move by Sony in a business sense.

Think of it as being on fire, and obviously wanting to put yourself out. You have three choices. The first is pour gasoline on yourself. The second is to jump in a tar pit. The third is to douse yourself with boiling water. The first one might save you, or will kill you that much faster. Depends on how lucky you are about the fumes, but yeah you can put out a fire with gasoline. The second might put you out, but getting the tar off might prove very tricky. Whats the point of saving your skin if it has to be ripped off. The third is the best choice sure its going to cause more burning, but your only left with the same problem minus the fact that the burning will stop once your done intentionally burning yourself.

Such is the situation with Sony. There is no good solution just the lesser of evils. They obviously do not want to decrease the value of their system, but they also want to reduce the price. Something has to give, and they cannot remove the other features like the player or the Cell. Not only are they Trojan horses, but the earlier software on the system requires them. They can hardly charge for their online service. Thats their Trojan horse for more profitable software distribution. So what else is left.

The bad decision was made years ago which lead to the PS3 being so excessively expensive. That was the only mistake that Sony needed to make. Every solution from that point on has been amputation by consequence. Cutting things off to save the patient. The alternative is to let the patient die. Were the PS3 the same price now as launch we would be talking about a dead system in a couple months. We would be talking about retailers pulling it from their shelves, and where the once exclusive titles would be going.

Sony might have saved the system, but there is nothing good about the results for consumers. We will not even know if the surgery was a success for many months. Many have said this is desperation, and they are probably right. The PS3 is perilously close to the precipice. This new sku has to work for Sony, and it has to work well. Otherwise the unthinkable could happen.

Honestly I think the PS3 will rise or sink based entirely on this sku. Will gamers accept it or not. Were they to accept it Sony will look somewhat brilliant in spite of the previous ignorance. Now if the gamers do not embrace it well systems can and do die. This new sku cannot even use the previous system as a crutch. This sku cannot survive off hand me down software. That means it is entirely dependent on its own library. This sku will stand alone, and there is a real question whether it can do that.

I suppose we will see, but a few months from now we will be looking back at this decision, and what was said now might be very poignant, or it will seem very silly. Only time will decide which side of the debate was right. Will the removal of this feature kill or save the platform.

 Who knows. Sony might be out of the console business by then. Who knows, only time will tell. See, you can spin it any way you want.

In AUS land you can't buy the old PS3's any more... well you can but they are hard to find and they are still priced at $999 (which is roughly $850 USD).

The new 40GB model is $699 (roughly $550 USD) and it doesn't play PS2 games... I have a PS2 but it's been packed away for a while now because I can't be fucked playing with cords any more.

Yes, that is the problem for me... there are no wireless controllers on my PS2 and I was looking forward to eventually being able to have no fucking corded controllers lying around my house any more... but it seems to be a bit of a pity because there is now way I'm ever buying a PS3 without back compat - until it's freakin cheap in a fair few years time... i'm not going to be missing much honestly.

Yep i'm coming to this debate a little late but I think this was a terrible move for Sony.

Not at all. Sony is precisely where they planned to be. Sony asked consumers what they wanted, and they said they wanted (1) a lower price, (2) rumble back, and (3) didn't care about BC. To its credit, Sony listened.

The $399/399EUR model is essentially an affordable BluRay player, and HDTVs are finally cheap enough to make a mass market possible. Consumers who want to preserve their PS2 library (like me) will buy the 60GB/80GB model, of course. But BluRay-related sales are going to kick up those PS3 numbers. It'll start small, because consumers are still making the switch to HDTV, but it will build over time.

People want backward compatibility, that is why we have products which feature this such as VCR/DVD combo player, hi-fi's with cassettes playable and so on. Would people be happy if the PS3 was not compatible with normal DVDs? No ofcourse not.

Most people do not move into new technology quickly so many are unwilling to let go of their older products since that still work for them.

The analyst above says what vgChartz posters have been saying for far longer.  Nothing new here.

As a side note, Sony's  rationalization of the removal of BC was that you could buy a 40Gb PS3 and a PS2 for significantly less than the price of an 80Gb.

Guess what the latest price cut for the 80Gb just did.  Oops.

Can we all just agree that these analysts are idiots that just guess and hope they are right?