[gumby]

Happens in hardware too: the way Sony made the PS2 compatible with the previous PS ("PS 1") was simply to place an entire first ten playstation on a corner of the PCB. Cheaper and more compatible than writing an emulation mode.

Object encapsulation made physical.

[ascagnel_]

The emulation there was actually a happy accident -- the MIPS processor of the original PlayStation was repurposed as the sound chip for the PS2. Sony realized during development that they could take advantage of the hardware for backwards compatibility for minimal cost.

The PS3 (Emotion Engine) and Nintendo DS (GBA cart slot) are the only consoles I'm aware of that have hardware only for backwards compatibility (although some games used the cart slot for pseudo-peripherals, such as rumble support or a guitar "grip").

[NobodyNada]

The GBA is another example: native games run on a 32-bit ARM processor, but it also includes a Z80 for backwards compatibility with older Game Boy models.

[jamesgeck0]

IIRC, the 3DS puts itself into a DS hardware mode when playing those games. It even has a GBA hardware mode, although Nintendo only used this for the "Ambassador" games they gave to early adopters of the console.