Originally Posted by Kougar
I wonder if Sony made the decision to remove backwards compatibility not just to save a few dollars off the production cost of their new console, but to also not deter from their unusually strong PS2 sales.
If it's the loss of PS2 sales Sony is worried about, then they should just release a more-expensive version of the PS3 that includes the hardware required for the emulation. Like you said, the chips can't be more than $15, but add the feature to the PS3, along with some other perks, and you'd imagine Sony would come out even further ahead than off a PS2 sale (although I'm not sure how much Sony clears off of one of these).
At least the PS2 is still being sold though for those who want it. That plays PS1 games as well, so overall, Sony's solution for playing older games is still far superior to Microsoft's.