Sony has stated that the PlayStation 3 will be backwards compatible, but now there is some question about how many games from the PlayStation 2 (and one) catalog will be playable. A programmer at Sony's UK division has revealed that the compatability will be accomplished through software rather than hardware, immediately causing speculation that we may see a limited library available, as was the case on the Xbox 360.

In the PlayStation 2, the backwards compatability for original PlayStation games is accomplished through hardware, basically embedding the unique guts of a PlayStation inside a PlayStation 2, then using that hardware when a PlayStation game is being played. For the Xbox 360, Microsoft decided to emulate the original Xbox hardware as best it could, and only allow Xbox games that were deemed playable to be played on the Xbox 360. The emulation was not tested thoroughly, as was apparent when some games had severe playability problems. One example was Mortal Kombat: Deception, which was originally on the approved 'BackCompat' list, but quickly removed after our flagship site, TRMK broke the story Mortal Kombat: Deception on the Xbox 360. Some people are worried, with good reason, that similar issues might happen with the PS3 when it is released.

Others in the gaming industry have begun asking the question about how much space the backwards compatibility emulation code will take up on the internal hard drive of the PlayStation 3, with good reason. The Xbox 360 hard drive attachment is required for backwards compatability, and the 'BackCompat' software takes up a significant portion of that space. With two systems to emulate, it's definitely not a small undertaking. The Sony programmers have a daunting task ahead of them, with not much time to make or break this previously-touted feature.

UK teams working on PlayStation HUB, PS3 back-compatibility [GamesIndustry.biz]