Backwards compatibility is a popular feature for new game consoles. The ability to have one console under the TV that can play multiple generations of games is valuable for a certain kind of gamer.
The rumored hardware architecture of Sony's new PlayStation and Microsoft's new Xbox makes it unlikely the new consoles will be backwards compatible. The Wall Street Journal, however, is reporting that Sony's new console may provide backwards compatibility by streaming games through the cloud.
Citing "people familiar with [Sony's] plans," the Journal states that the next PlayStation console will offer PlayStation 3 games and stream them to users online.
This rumor seems credible because Sony last year purchased cloud gaming company Gaikai for $380 million. At the time, Andrew House, president of Sony Computer Entertainment, said that the company would use Gaikai to "deliver a world-class cloud-streaming service that allows users to instantly enjoy a broad array of content ranging from immersive core games with rich graphics to casual content anytime, anywhere on a variety of internet-connected devices."
If the rumor is true and the next PlayStation console does include streaming games, the challenge for Sony will be keeping server and bandwidth costs down. Just last year, Gaikai competitor OnLive had to re-form its company and lay off half of its staff as a measure to stave off bankruptcy.