PS3 drops backward compatibility

In case you haven't heard, there's a new 40GB SKU PlayStation3 coming from Sony Europe -- and it drops backward compatibility for PS2 games altogether.

I don't know yet if this is going to happen in the United States, and while it is irritating, I think there are some bigger things going on.

First, the irritating part. Parts.

Sony blasted Microsoft for Microsoft's multiple SKU approach -- a "Premium / Pro" (hard drive and wireless controller) and a "Core" (the stupid, hard drive-less configuration). This is all Microsoft had until this year, when they released the Elite. There are special editions of the console (Halo 3, Simpsons, etc.), but those don't count as mainstream retail SKUs to me. Oh, and the "Core" will probably be replaced by the "Arcade" version, which differs from the "Core" by switching to a wireless controller and including a memory card.

So, on the Xbox 360 side, you'll have three retail configurations, and two special editions.

And Sony, who criticised multiple SKUs from Microsoft as confusing consumers, has had a 20 GB model, a 60 GB model, and an 80 GB model. Then they phased out the 60GB model in the U.S., and it looks like they're about to do the same in their European territories (Europe, the Middle East, Africa and Oceania). And they've introduced this new 40GB SKU there (and, shortly, in Aussie Land).

And it's not just a hard-drive change on the 40GB version. It'll still come with the SIXAXIS wireless controller, WiFi, and HDMI, but will have only two USB ports (not the four on the 60GB/80GB), and no multi-memory card port.

And it will not be backwards compatible with PS2 games.

Which leads to Irritation point #2: Dropping backwards compatibility. First, it's nice for gamers to have. Second, Sony was a bit uncharitable toward Microsoft as to Microsoft's not supporting backwards compatibility out of the box. Sony told GameDaily BIZ the feature drop is due to "both the reduced emphasis placed on this feature amongst later purchasers of PS3, as well as the availability of a more extensive line-up of PS3 specific titles".

Thankfully, Joystiq does a good job of refreshing folks' memory by quoting Sony's Phil Harrison as saying in 2006,

"[B]ackwards compatibility, as you know from PlayStation One and PlayStation 2, is a core value of what we believe we should offer. And access to the library of content people have created, bought for themselves, and accumulated over the years is necessary to create a format. PlayStation is a format meaning that it transcends many devices -- PSOne, PS2 and now PS3."

"Hello, Pot? Kettle's on line one."

Besides the embarrassment, what's with dropping the backwards-compatibility feature, when it's "a core value"?

I think there are at least a few options.

First, in the Sony versus Microsoft versus Nintendo race this round, I'd argue it's not the hardware -- it's the game library. Sony knew this in the PSOne and PS2 era, but they seemed to have forgotten it this round. This holiday, Sony will have 65 games for the PS3. Microsoft will have, what -- 250? 280? Halo 3, Blue Dragon, Mass Effect, Eternal Sonata, BioShock, and other console-selling Xbox 360 exclusives? Three hundred and eighty-five playable original Xbox games (and I've personally played at least 36 last-gen titles on my 360.)

By dropping PS2 support in the PS3, Sony forces PS3 owners to buy PS3 games. Games expensive to develop, and needing to recoup cost. Sony may be hoping money shifted from buying PS2-supported titles will go to PS3 game purchases.

Secondly, Sony could be hoping the move causes people to buy PS2 consoles to play PS2 games. Sony is taking a bath this console generation, coming in an arguably distant third. But the PS2 was selling well, and a recently (quietly) revamped version saw manufacturing cost efficiencies. Sony may be realizing the PS3 was cannibalizing PS2 sales more than expected, and they need to drive up their flagship sales. (As an aside, I've said multiple times only Nintendo seems to be able to avoid the self-cannibalization model.)

Or this could be as "simple" as a "right hand no knowing what the left hand is doing" situation. Could it be SCEA is shaking their heads at SCEE? (Probably. But for this? Dunno.)

Or it could be more complex. Think myriad factors, like does moving away from PS2 support in the PS3 reduce support costs? Is the software emulation unaccountably dropped from the new 40GB SKU actually somewhat hardware dependant, and does SCEE measurably reduce its loss-leader margin by taking out this component of the hardware?

And maybe, maybe this could be a good move. Maybe it introduces another SKU at enough of a reduced cost that meets enough of a new market segment that it will be profitable and non-cannibalizing.

Or maybe it's just Sony's turn at channel stuffing.

So why is it irritating?

Because Sony said one thing, lambasted the competition, then turned about and did the same thing -- in spades (at least Microsoft is releasing more feature-rich SKUs). Companies are getting a lot more scrutiny and less obfuscation in what they're doing -- why not come clean? Why not, "Market demands are currently not aggressive enough to justify manufacturing costs, so after serious study and consideration, we've decided to remove features that will least impact our core Sony PlayStation3 constituency."

Or maybe something's broken on the whole console retail model. I mean, does Sony have apologize each time they release a new DVD or music player? Do they have to go on the defensive every time they release a BetaMax, mini-CD, Sony Memory Stick, UMD, or equivalent?

Wait ...