USAToday has the story about the PS3 coming out in Europe not having the chip to play PS2 games. There will be a software solution to play PS2 games, but it isn't clear yet how many games will be compatible with that, and how well they'll run. Not that the PS2 chip in the PS3 was working very well, there were a number of incompatible games, but I don't believe removing it will improve the situation for the Europeans. It is a simple matter of cost-cutting.
So for the first time I'm questioning my resolve to buy a PS3. I had already planned to postpone the purchase until christmas, but now maybe I won't buy one at all, or only much later. I have a huge library of PS2 games, and in comparison there aren't all that many PS3 games out I'd really like to play. So unless the PS3 is fully downward compatible, I'd need to decide between the PS2 and PS3, and the PS3 would lose out in that.
Sony is on a bad trajectory, Nintendo is clearly winning the next generation console wars this year, with Microsoft a solid second, and Sony trailing far, far behind. For the PS3 to still pull up ahead there would need to be a major breakthrough of the Blue-Ray system. With the average Blue-Ray player still costing more than a PS3, that would make the PS3 attractive again. But right now nobody knows whether Blue-Ray will be the next Betamax or the next VHS, and paying extra for having Blue-Ray in a gaming console doesn't sound like a good plan right now.
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