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The PlayStation 5 can play PlayStation 3 games, Sony just doesn't want you to for some reason
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Honestly, I think while they had a financial incentive, they probably also just didn't want to bother with the all the work required to add production-level support for PS3 games and and the maintenance complexity of supporting it.
It's one thing to develop a strong proof concept, there is a lot more involved with getting it to the market as commercial product (with guarantees and support).
That being said, excellent work by the folks who figured this out.