Sony currently rumored to be dropping the Cell processor for the PS4 in favor of a "fusion" chip produced by AMD.
According to several sources and earlier rumors, Sony is currently in the process of ditching nVidia who worked on the PS3's GPU chip in favor of AMD for the PS4 GPU chip.
AMD is rumored to be creating a fusion chip which would allow AMD to work on both the CPU and GPU with the company itself only recently working on such chips in Macs and other devices.
The new fusion chip in theory would be a lot more developer friendly than the Cell due to it being closer to the PC-like structure similar to what Microsoft wanted for the Xbox 360 than the overtly complexity the Cell provided.
If Sony were to keep a version of the Cell processor for the PS4, they would have to work on it on their own due to IBM canning their work and development of the chip about 2 years ago in favor of a different approach. Other companies in the Cell association have either dropped out or switched focus away from the Cell.
In terms of compatibility, it would be very unlikely Sony would offer backwards compatibility to disc-based PS3 games. The recent track record also leans towards them not bothering based on the issues with the PS3 having limited compatibility with the PS2 and the lack of PSP compatibility with the PS Vita.
http://kotaku.com/5889410/playstatio...-wild-theories
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Daily Recap:
1) Blizzard has laid off 600 workers from the company with the majority being unrelated to the current projects in development.
http://www.giantbomb.com/news/blizza...elopment/4009/
2) Zone of the Enders HD Collection set will be having a late 2012 release date for the Xbox 360 and PS3 according to Konami.
http://www.egmnow.com/articles/news/...ing-this-fall/
3) Eurogamer has reported UK retailer GAME have added all EA games after SSX and Mario Party 9 to the growing list of games the retailer chain will not be carrying for sale.
http://www.giantbomb.com/news/uk-ret...products/4008/