[quote name='rickonker']I think cutting PS2 BC was a big

ing mistake. "We're having trouble with the cost of our new console and it isn't selling well...so let's take out the feature that lets it play games from the best-selling console of ALL TIME. Yeah."[/QUOTE]They had to because the truth is, the costs to add PS2 BC would put PS3 at the $500 range at the cheapest. If people feel $400 is already too expensive, just how would you think PS3 would be doing right now if the cheapest SKU was $500 just to add the PS2 BC. Sony's initial plan was to keep it, but due to slower than expected PS3 sales along with people complaining the PS3 was priced too high, that's why Sony had to remove it. If people never complained about the PS3 pricetag in the first place, it would have never been removed.
For the most part, it actually did more good than harm, because I know MANY PS3 owners who jumped on the $400 pricetag, saying PS2 BC didn't matter to them. If PS3 was still $500 right now just to add that feature, there's no way they would have jumped onto buying a PS3. Like I explained in many posts before, adding the PS2 BC is not cheap. If it was 100% software like the PS1 emulator, they could have added it at no extra costs. But since PS2 BC requires at least a GS (because no console GPU out there has a high enough fill rate to emulate it) along with other components, that brings the costs up, PCB size increases, and so on. Sony's goal now is to also stick with one SKU configuration, and since people want a cheaper PS3, that's why PS2 BC was removed and never coming back. Let's just say adding the PS2 hardware components costs around $50 (It's being said to cost around $50-$75 to add). Sony sells 10 million PS3 40GB/80GB Core/160GB PS3 consoles at $400. Sony would have lost an extra $500 - $750 million extra in their gaming division just to add it. Since Sony is still producing PS2 consoles and making a small profit off of every one, that was another reason for them to remove it because if someone buys a PS3 just to buy/play PS2 games, Sony has lost money on a new PS3 console sale and isn't getting that money back lost. That's why if someone really wants to play PS2 games, Sony wants you to buy a PS2 because they make money off of that. If people want to play PS3 games or blu-rays (especially if a blu-ray is a Sony movie), then they want you to buy a PS3 because they will make money off of you when you buy games, accessories, etc. PS2 BC isn't coming back until PS2 stops selling, PS3 hardware costs greatly decrease, and when they finally get a 100% PS2 software emulator working (which requires zero hardware components). I'm not putting much hope into that happening, because the current Cell + RSX architecture makes it VERY difficult to do.
People near launch were whining about the $500/$600 price tag, when it costs Sony $800/$840 to produce the PS3 consoles. The main motherboard alone with all components (not including blu-ray drive, HDD, power supply, bluetooth, etc.) cost them $500. Even using a DVD drive, removing WiFi, HDD, and so on, PS3 would still cost over $600 to produce. Oh course over time, some of the costs have dropped (especially blu-ray drive, Cell and RSX shrunk, HDD prices dropped, etc.). However, the costs that didn't drop so much was the PS2 BC components (whether the EE was included or not) because they're towards the bottom of the exponential curve price wise (where they started out high, but costs have come down and has mostly remained fixed). It was being said that PS2 components contributed to 20-25% of the main PS3 motherboard price. The first thing Sony tried to do was cut out the EE (by emulating it, but still using PS2 components) along with some other changes, but PS3 was still around $600 or so to produce. People still cried and said they wanted a $400 PS3 (The $500 drop of the 60GB was NOT because of costs reduced. The 60GB was expensive and Sony was trying to phase it out. They phased out 20GB sooner because they were losing $300 on every console they sold, more than any other SKU). So Sony had to try to cut whatever they can to bring the costs down (people also need to understand that Sony including WiFi because some countries it's very important to have, and it's actually much cheaper and requires fewer components than PS2 BC). They couldn't remove bluetooth, blu-ray (although the newer blu-ray diodes don't make adding blu-ray all that more expensive), HDD, and so on. PS2 BC was not needed to make the PS3 function either, so that gave another excuse to remove it.
IMO, PS2 BC is very overrated. You can't be signed into PSN while playing them, have to reconnect the controllers, PS2 upscaling is terrible on PS3, not every game works regardless of SKU, some accessories will not work on PS3, and so on.
But right now everyone has a choice. Would they rather see a PS3 without PS2 BC at $400, or would they rather see a PS3 with PS2 BC selling at $500 as the only SKU? Regardless,
If Sony never removed PS2 BC, we would NOT be seeing a PS3 selling at $400 right now. That is why removing it was not a big mistake, since people STILL have a issue with the PS3 pricetag. Just imagine that now, the cheapest PS3 on the market (but has PS2 BC, like a 40GB/80GB core configuration) selling at $500 (maybe as cheap as $450) against a $200 360 Arcade and $250 Wii. Does that seem like a good situation to be in for Sony?