A new report on Digital Foundry has said that the PlayStation 4 will gain the ability to locally emulate PS1 and PS2 titles.
The anonymous source, reported to be working on Sony's PlayStation Now streaming technology, says that the cloud streaming tech is only currently scheduled to support PlayStation 3 titles for now.
Sony's internal emulator is already used on the PlayStation 3 and PlayStation Vita, but the incarnation in the works for PlayStation 4 is said to be aiming for the ability to run the games in native HD resolutions. This would offer a distinct visual advantage over the current PS1/PS2 upscaling, and open up visual options seen in emulators like PCSX2. Running classic PlayStation games locally on your PS4 would also mean that any of the potential downsides of streaming--such as input lag--would be non-existent.
PlayStation Now is expected to launch in the US this summer, and was announced at the start of 2014. So far the service has been only been shown running PlayStation 3 titles, predominantly Naughty Dog's excellent The Last of Us.
For more information on Sony's ambitious cloud streaming service, GameSpot has compiled everything currently known about PlayStation Now into one article.