Backwards compatibility was an issue with the PS2 to PS3 transition because the compiled source-code on the game discs can not run directly on the Cell processor; and the Cell processor is not powerful enough to emulate the PS2's GPU and CPU well enough to offer high game compatibility. The game engines from the PS2 can (and often were) rapidly ported to the PS3, and the reason why game development has taken so long is the engines needed to be (dramatically) upgraded to offer the kinds of features and effects people expect from PS3 games; and the time (and cost) of generating graphical assets for a PS3 game are dramatically higher than a PS2 game.

That would mean no BC in the PS4, as well as potentially higher RnD costs than if they just upgraded the PS3's processor a bit. But if they can get something that is easier to program for, better suited for gaming and cheaper to manufacture, then I say go for it.

I think the same article posted by the OP also stated that IBM would be carrying over Cell like features into a more "GPU" like architecture. Now that is quite interesting.

Let me be more specific:

"Pulling out of the development of the Cell processor doesn't mean the end, as Mr. Turek explained, as features of the Cell will continue to be integrated into other processor designs. Without any specific mention of an upcoming model, the company has mentioned that it plans on developing a hybrid technology, which will incorporate both graphics and processing power on a single chip. This is a direction that has been set by NVIDIA, and the launch of its much-anticipated Fermi-based graphics cards."

http://games.techwhack.com/2450-ibm-cell

The whole reason they are doing this, is because, as they state, the market is moving towards GPU/CPU CPU's. In other words, as they mention, they are going to integrate the cell design in future processors but they won't continue research in the cell processor as a standalone. It's quite simple and frankly people should stop blowing every small thing into proportions and start reading what's actually said and not just titles.

the 1.4 GHz Niagara owns every (up to 8GHz overlocked) Processor. And hey, it isnt hard for a 3 year old to win against a new born baby.

I hope Sony sticks to the cell, because the one in the PS3 is one of the oldest model's, and the Cell's technology and architecture has much more potencial in the future.

And hey, until i dont see any Uncharted 2 like Games on PC, i think Sony can be proud about their system.

Yes it's interesting. The thing I like about consoles is they tend to use "different" and often exotic architecture. The 360, though closer to a PC, came out of left field and used a 3 x Power PC CPU. IBM are kind of the big winner from this Gen. I am pretty sure the Wii uses an IBM CPU as well.

yupp, the Wii uses one from IBM too.

SPEs are out, stream processing is in. I guess you could say that it wasn't the Xenon model which killed the Cell but the Xenos model.

Squilliam said: SPEs are out, stream processing is in. I guess you could say that it wasn't the Xenon model which killed the Cell but the Xenos model.

What's stream processing?

Business plans can change.  That article looks like it was from January, whil the one in the original post looks like this month.