Sony Computer Entertainment Europe has announced a hardware revision for its Playstation 3 devices when they launch in Europe on March 23. The European version will have its PS2 chip removed, and software emulation will take over for most of the PS2 functionality. This means that very few PS2 discs will work with the new PS3.

"The backwards compatibility is not going to be as good as the U.S. and Japan models," said a spokesperson from Sony. Currently the North American and Japanese models have the PS2 chip installed, which allows them to play 98 percent of old games.

"PS3 is first and foremost a system that excels in playing games specifically designed to exploit the power and potential of the PS3 system," said David Reeves, President of SCEE. "Games designed for PS3 offer incredible graphics quality, stunning gameplay and massively improved audio and video fidelity that is simply not achievable with PS and PS2 games. Rather than concentrate on PS2 backwards compatibility, in the future, company resources will be increasingly focused on developing new games and entertainment features exclusively for PS3, truly taking advantage of this exciting technology."

"Sony is managing expectations by saying now that the new console will play fewer of the old games, and that's a good thing," said analyst Alex Kwiatowski at British market research group Vertical Market Technologies. "I'm as disappointed as the next game player about the reduced backward compatibility, but even the most nostalgic, misty-eyed gamers will have their steely hearts impressed by the new features that PS3 games provide."

Speculation is abound on whether or not this new version of PS3 will find its way to North America next. 1UP contacted Sony Computer Entertainment America for some answers. "We have no announcement regarding any hardware specification changes for PS3 in North America at this time," they were told by a company representative.

Sony will be offering regular downloadable firmware updates from the Playstation Network and via PS3 game discs as of March 23, launch day. However, European gamers will need to hang onto their PS2 systems if they want to continue playing their favorite PS2 games.

Gamers will be able to view a list of titles online that are compatible with the PS3, but the site will not go live until launch. No compatible titles have been announced so far, so it is uncertain what the actual number is. Check back with RPGamer for more information on this story as it becomes available.