Has the PS3 been hacked and if so what does it mean to the games industry?

On Friday the following post appeared on Geohots Blog, this is the same person who has been responsible for many of the iphone hacking and tools.

I have read/write access to the entire system memory, and HV level access to the processor. In other words, I have hacked the PS3. The rest is just software. And reversing. I have a lot of reversing ahead of me, as I now have dumps of LV0 and LV1. I’ve also dumped the NAND without removing it or a modchip.

3 years, 2 months, 11 days…that’s a pretty secure system

Took 5 weeks, 3 in Boston, 2 here, very simple hardware cleverly applied, and some not so simple software.

You can read more on his blog here

He goes on to state that he’s not revealing the exploit yet and is some way from using it for anything useful. He also later posts a further post listing various PS3 function calls.

Now this information could well turn out to be a hoax but the fact that we are 3 years into the PS3 lifespan and the machine still has no piracy issues is very impressive. Its clear that whatever security measures Sony have managed to implement have been successful and hints towards console piracy may soon become a thing of the past for future generations. This can only be a good thing for the video games industry, you only have to compare the sales of any top title this year on 360 and PS3 to see that PS3 games sales are comparatively higher with a lower install base.  Surely the fact that the 360 is relatively easy to pirate games for must be influencing its sales.

So what does this mean to the games industry?
Well if the PS3 has been hacked and the information gets released so users can play pirated games I expect several things will happen.

PS3 hardware sales will increase.
Many game pirates at the moment will solely use the already hacked 360 (why purchase a PS3 when games are free on the 360) but if they can also acquire games for the PS3 I think we will actually see a rise in hardware. So a knock on effect of a hacked PS3 might actually increase Sony’s sales and re-capture some of the market share.

Blu Ray burners and blank blu ray media sales could increase.
Depending on the methods used to pirate the games we could see an increase in people buying blank blu rays to copy the games. Before the 360 was hacked Dual layer DVD9 burners and media were very expensive. But as demand and production for these increased prices fell, pirates help drive media sales.

PS3 software sales will decrease.
If copying the games is easy enough then you would expect software sales to decrease as pirates no longer purchase games legitimately. Of course with an increased install base then there may be opportunities to sell further content to pirates. PSN, DLC or other content might actually see an increase in sales, just because users pirate a game doesn’t mean they wouldn’t be prepared to purchase some more content for it.

360 Piracy
Microsoft’s stance on 360 piracy has always been zero tolerance, any user who modifies their console risks being banned from their Xbox live system. Fair enough but seeing that users must pay to access live I think MS actually cuts their own nose off here, they must lose out on a huge amount of revenue from pirates who would gladly pay for the live system. Not only that but the XBLA games store titles also cannot be purchased from a banned console, again a loss in revenue. With PSN access being free and Microsoft’s paid XBLA a subscription service pirates may well decide to move to PS3 instead totally.

Microsoft’s inability to prevent pirates from copying games for the 360 hurts publishers and lowers sales. As a publisher at the moment I would be considering a delayed release schedule on 360. If sales are higher on PS3 due to a lack of piracy right now then launch games 3-6 months earlier on PS3, that way if the pirates want to play the latest title right now they will be forced to purchase. Of course if the PS3 is also compromised as well now then publishers are going to need to find other methods to capture the pirates revenue and I don’t believe Microsoft’s banning is the answer.