When Sony released its PlayStation 3 games console in the U.S. and Japan, it was criticized because despite its vaunted "backwards compatibility" with games for the older PS2 console, it couldn't play them all. But Sony plans to offer European customers a special version of the PS3 that is compatible with fewer older games, not more.

The revised console will go on sale on March 23 in Europe, the Middle East, Africa and Australasia, with some components replaced by emulation software, Sony said Friday. That will cut manufacturing costs -- but also functionality, as the new version will play fewer games developed for the PlayStation and PS2 than the U.S. and Japanese version.

Console makers typically try to keep hardware prices down to attract users to their platform, making profits later from sales of games. Another tactic is to make consoles compatible with games produced for the previous generation of hardware. Microsoft took that path with its Xbox and Xbox 360, while Nintendo's recent launches, the Wii and DS, will play games for the GameCube and GameBoy Advance, respectively.

The version of the PlayStation 3 launched in the U.S. and Japan contained special hardware, notably the PS2's Emotion Engine microprocessor, just to ensure compatibility with PlayStation and PS2 games. Nevertheless, the PS3 was still incompatible with more than 200 PlayStation and PS2 games at launch.

Now that situation will get worse.

"The Emotion Engine has been removed and that function has been replaced with software," said Nick Sharples, a spokesman for Sony Computer Entertainment Europe Ltd. in London. That has a "slightly detrimental effect" on compatibility, he said.

Sony won't say yet which PS2 games will play on the European PS3, as it is still developing the emulation software. A full list of compatible games will be published the day the console goes on sale, Sharples said.

The hardware changes are intended to cut manufacturing costs. "If we are able to reduce the production cost, it has a follow-on effect" on the selling price, he said.

Hardware revisions are a normal part of the lifecycle of a games console, although they don't usually affect functionality.

"The PS2 is on its 13th hardware specification in the six-and-a-half years it's been out," he said.

As Sony refines the emulation software to make more games compatible, "It would be reasonable to assume that the better-selling games are the ones we will be putting effort into," Sharples said.

Successive software updates have made the U.S. version of the PS3, with its dedicated hardware, compatible with 98 percent of PS2 games, he said.

Apart from the missing Emotion Engine, the rest of the European console remains unchanged -- although the company will only offer one model, with a 60GB hard disk, in Europe, priced €599 or £425. That model sells for around $599 in the US, where Sony also offers another, cheaper model with a 20G-byte hard disk.