The PS3 used a drastically different CPU architecture known as the Cell processor. It was notoriously difficult to program for, even when it wasn’t being emulated. The PS5 simply doesn’t have enough processing power to emulate the awkward CPU inside the PS3.
The PS4 has a substantially similar architecture to the PS5, simply slower. So, it’s fairly easy to play PS4 games on the newer system. The PS1 and PS2 are old enough that, even though they were different architectures to the current system, they can be emulated.
Interesting comment from Sony. When the PS4 came out they said they hadn’t reached the limits of the the PS3 but recognize that the industry had difficulty taking advantage of all the processing power do the cell architecture. It was also time to switch generations.
Ultimately they decided to change that and used the PS4 architecture that was more comfortable with where the studios were developing.
If you look into it the cell architecture of the PS3 if absolutely amazing. Just didn’t take into account what the developers would have to do to work effectively on it. Also an example of Sony trying to steer the industry the way ‘they’ wanted it to go.
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