SCEE seems to be trying to cut its manufacturing costs on the soon-to-be-released PAL PS3. Sony has removed some chips from European PS3 and reduced its PS2 Backwards Compatibility. The press release tries to put a bit of spin on this one.

"The European PS3 will feature the Cell Broadband Engine™, 60 GB hard disc drive, Blu-ray Disc player, built-in Wi-Fi connectivity, SIXAXIS™ wireless controller. It also embodies a new combination of hardware and software emulation which will enable PS3 to be compatible with a broad range of original PlayStation® (PS) titles and a limited range of PlayStation®2 (PS2) titles."

How important is backward compatibility? No one knows which or how many games will be supported, but that word “limited” doesn't look very encouraging.