The PS5 will play at least most of the top 100 PS4 games (whatever they are), which is a huge step up from the lackluster backwards compatibility on the PS4. However, it looks like PS5 backwards compatibility might only be limited to the PS4.
Mark Cerny had a whole part dedicated to PS5 backwards compatibility in his hardware ASMR hour. In it, he spoke about the expensive hardware backwards in the PS3 and how PS5 was fixing that by adding the “logic and feature set of the PS4.” This means that cutting costs — like what Sony did with later PS3 systems — won’t also slice out the ability to play old games. But, as you can see in the above picture, Cerny only spoke of PS4 games.
It could be something Sony is still working on or isn’t comfortable announcing yet, but this is another signal that the PS5 won’t be able to play PS1, PS2, or PS3 games and might just be limited to most PS4 titles. There were many rumors surrounding this very topic, leading many to believe you could play any PlayStation game on the PS5 (some “leaks” even suggested PSP games). That doesn’t look like it is the case. The Xbox Series X, on the other hand, will have extensive backwards compatibility that stretches all the way back to the first Xbox.
Sony’s history extends far past that so it’s a little disappointing that it can’t quite keep up in that regard. Of course, there’s always the possibility it being added later or having a scattershot approach that goes on a game-by-game basis similar to how the PS3 and PS4 can play some PS2 titles on PSN. However, coming out of the gate with semi-limited backwards compatibility puts the PS5 in another unfavorable position when compared to its competition at this early stage. The systems are still a ways from launch and hopefully Sony’s silence on more extensive backwards compatibility was because it wasn’t ready to be talked about rather than it not existing at all.