Here's what's been said:

"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."

"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."

So there you have it, here in the UK we have to fork out 50% more for a machine that won't have as much functionality. I checked a few forums and people are going crazy over this, there's been back orders cancelled left, right and centre. Sorry folks, somethimes gaming news is as ugly as the real thing...