I've seen that. Of course, it sounds a little too good to be true, yet is short on details. All that work has to have a revenue model to justify it, so I'm thinking we're going to see attempts to double-dip rather than giving everyone free PS2 emulation. I'd love to be wrong, of course.

Well, if you can get the government to give a bail-out/massive subsidy to the game companies they can give everything away for free! :)

But seriously, as someone who's got a 401k and an IRA (which likely has Microsoft stock among other big companies), I can certainly understand the pressure they're under to make sure they keep stockholders happy. Especially with so many baby-boomers getting ready to retire. Likewise, notice Microsoft and Sony aren't getting any sort of massive bailouts - that's a good thing. Gotta watch them dollars...

There's always PC gaming. There are a lot more revenue models available out there, including various shades of "free" (and hopefully we'll see them more and more this and next gen).

The term "big brother" has already been taken, hence, "little brother." I'm not the one who made the term :p

The PS2 will eventually be discontinued. The PS3 might take the center stage in someone's house, relegating the PS2 to the kids, storage, being sold, etc. Whatever.

PS1 games are still supported on the PS3, so they're not a concern. If you've got old PS1 games (like many of my friends who play RPGs), you're fine. If you've got PS2 games and a non-PS2 BC model of the PS3, then you're in a not as good position. Do you hope they reenable PS2 BC through software? Do you buy another PS2 "just in case" ($100 USD)? Do you hope game companies decide they can make some more money off of you, forcing you to rebuy a game you already own? Stuff like that.

For better or worse Sony set the expectation, and now trimmed it out. It would've been better for them not to ship with PS2 BC at all instead of removing it later on, PR-wise.

I'm not saying Microsoft's gone the best way of doing things! However, by being so closed they're likely:

1. Making more money than if they licensed out memory.
2. Given themselves one less hardware combo headache (I've had 3rd party stuff not work right/well on consoles before).
3. Made a very clear tiering of storage options. The bigger the memory card capacity, the less appealing the harddrives are.