When I got the XSX recently, it was so I can play Starfield when it comes out. That was basically the only reason. I did not realize the extensive backwards compatibility that this thing has. But since getting it, I've been playing FF13 trilogy, Fable games, Dragon Age series, Lost Odyssey, etc. Basically all games of note going all the way back to the OG Xbox will play on the latest console. Either with the original disc, or you can even purchase them online.
The point of my post is I think it's a real travesty that PlayStation doesn't do this. I don't understand it. First of all, you cannot buy most PS1-PS3 games on the digital store. You can't use the discs. The main way to get access to these games is through the top tier of PS+. But the selection is quite limited, and PS3 games in particular are streaming only.
With the selection, I want to point out that you can't even play most of the Killzone series on PS+. This is a first party title. There is absolutely no reason that Killzone shouldn't be available. Killzone 1 isn't even on there. A PS2 title that is not graphically demanding.
As for the streaming of PS3 games, maybe this was justifiable back on the PS4 because the PS3 has a unique architecture that can be difficult to emulate without performance drops. But with the capabilities of the PS5, it's not credible to claim that it can't emulate a PS3. It certainly could, if Sony wanted to assign resources to make an emulator.
I am not a fanboy of one or the other, and I probably still play more on the PS5 than my Xbox, but I think Microsoft should market their backwards compatibility superiority a lot more than they currently do.
Pretty sure the PS5 drive can't actually read CDs, so that's the PS1 library and most early PS2 games gone right way, even though they can be emulated pretty easily. The PS3 should be possible, but they haven't bothered when you can play it streaming.
I guess the awkward truth here is that there's no real business need to have it. Most of us into retro games will have a way to play them already, either via PC emulation or old consoles. And if you show a Gen Z kid some of the horrors we used to enjoy on PS1 (although I maintain Sheep, Dog 'n' Wolf is an underrated classic), they'd run screaming back to Fortnite and CoD.
It would be nice to have it, but nobody is not buying a PS5 because they can't run Terracon. They're still selling them as fast as they can make them, even with the economy in shambles.
I remember when Sony announced they were stopping production on backward compatible PS3s. I ran out and got one, because I still had PS2 games I wanted to finish. The BC PS3s were more expensive than their non-BC counterparts. And the PS3 was already an expensive machine.
I think I played 2 or 3 PS2 games on it. And never with consistency. Plus, these older games looked terrible on modern HD screens. And frankly, I was more interested in playing current gen titles. For example, I got a PS5 so I could play FF16. Not so I could keep playing FF15 or FF13. It really ended up being a real waste of money to buy that more expensive PS3.
And many of the games eventually re-released on other platforms: PSP/Vita, Steam, Switch, later-gen consoles, etc. I play a lot of JRPGs, so that helps.
Backwards compatibility is something I really don't care about. It'd be nice, I guess. But I still have my PS3 and PS4. If there's something I really want to play, I can boot those up. Or just see if the game is available on Steam.