In an attempt to make put an emphasis on their newest console rather than continuing the popularity of their previous ones Sony has announced that the newest PS3′s rolling off production lines will not have hardware capability like those of previous North American console releases. Instead they will use a software solution like the one in European console. This means that instead of using hardware for backwards compatibility the new PS3s will use an emulation software for backwards compatibility, similar to that of the 360.

(Thanks to Crash for the clarification.)