If you're wondering what happened to Sony's initial promise of full PlayStation 2 backwards compatibility in the PlayStation 3, the answers is simple: money. Speaking with a small room of journalists at last week's E3, SCEA's President and CEO Tretton explained that the tough decision came down to production cost and hardware priorities. 

"It was not our goal to bring a new platform out at $599," he said of the initial PlayStation 3 launch, explaining that they began thinking about ways to lower production costs almost immediately. Weighing the cost of the different components and features, backwards compatibility seemed like something they could afford to lose. 

"I think the common feeling internally was that backwards compatibility is a nice thing to have," he continued, "but as you moved beyond launch, there were going to be less times when somebody pulled out a PS2 game and put it in their system."

"If you paid $599 for [one] machine that had backwards compatibility, now for $529 you can get a PS3 and a PS2. You can stack them on top of each other if you really want to," he jokes. "I'm not saying that literally, but [that's] in terms of the financial investment that we ask people to make."

Tretton ignores the fact that it's impossible to stack a PS2 on top of a PS3 because of its curved-top design. And since the slim PS2 opens from above, putting a PS3 on top of it would be foolish. But he does make some interesting points. Is backwards compatibility a deal breaker for you, or are you OK with having two Sony consoles in your entertainment center?