From kotaku.com:
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This whole backwards-compatibility thing on the new 40GB PS3 is a pinch confusing. Why, exactly, can't the new model run PS2 games when the old one could? Tired of asking questions of the night, I instead asked SCEE.

"The 40GB model, to be launched in Europe on 10th October, is a new model and is not equipped with any of the semi conductors from the PS2, and backwards compatibility would therefore have to be achieved by software emulation alone. The sheer numbers of PS2 titles available, together with the increased complexity of using a software only solution for each and every title means that to ensure accurate software emulation for the majority would be technically challenging, time consuming and costly. As we have mentioned on several occasions, our engineering resources are now focused on developing new and innovative features and services for the PS3 and, as a result the 40GB model does not have backwards compatibility with PS2 titles."
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Full Story: kotaku.com

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