PlayStation Now beta invites are going out, heralding what seems to be the start of Sony's backwards compatibility plans for PlayStation 4. It's starting out with streaming PlayStation 3 games, and a rumor is circulating that Sony has other plans for the PS1 and PS2 legacies.
Eurogamer reports that a "well-placed source" says only PS3 games are planned to stream through PS Now. According to the report, Sony has plans to go a more conventional emulation route for PS1 and PS2 games, possibly with some HD enhancements similar to the PS2 rereleases we saw on PS3.
Since Sony already has already made emulators for PS1 and PS2 games on the PlayStation 3 (and PS1 games on Vita), the company reportedly thinks the PlayStation 4 could easily handle it too. The company is said to be actively pursuing this emulation strategy, with some new upscaling tricks to keep the older games from blurring. The effect would be something like the "HD remasters," but with the upscaling performed through the emulator to save developers the trouble.
This is all based on the word of an anonymous source, so take it with a grain of salt. If true, it doesn't necessarily mean that PlayStation Now will never stream PS1 or PS2 games, but having an emulation solution as well would give Sony options on how to sell pieces of its back catalog.