According to an AP report, The PlayStation 3 going on sale next month in Europe will not play all PlayStation 2 titles. The system, which will only play a fraction of PS2 PAL titles. The European PS3 will lack an important chip that allows this. This allows SCEE to cut costs and speed up production so that they can meet demand in the region. The European PlayStation 3, which will go on sale March 23, won't feature a PS2 chip, but will rely on software emulation to give players backwards compatibility. How this affects older PSONE games is another matter entirely. Downloads for the European PS3 will also be available for playing more PS2 games, but the number of PS2 games the machine will be able to play is still undecided as work is still ongoing to make as many games as possible playable.