U.S. Customs Conducts Mod Chip Raids

August 2, 2007 By Nick Mokey

U.S. Customs Conducts Mod Chip Raids

Chips that allows consumers to bypass copyright protection were the latest contraband targeted by the federal agency.

U.S. Immigration and Customs (ICE) agents stormed 32 separate locations in 16 states on Wednesday, but they weren’t searching for guns, drugs or even illegal immigrants. The officers were on a hunt for mod chips, the hardware that makes it possible to bypass copyright protection on consoles such as the PlayStation 2, Xbox and Wii.

All modern consoles have built-in hardware schemes to prevent users from playing games from outside their region or copying them. Since the instructions are written onto chips that can’t be altered, it’s impossible to circumvent them with mere software measures as they might be on a computer. Instead, hackers devise and market mod chips, which must be physically soldered onto a system board to defeat the console’s protection.

According to the Entertainment Software Association, mod chips cause the industry to lose billions worldwide in lost sales. The U.S. Chamber of Commerce speculates that they cost the U.S. economy between $200 billion and $250 billion every year, at a loss of 750,000 jobs. ICE agents were seeking the manufacturers and distributors or such devices in Wednesday’s raid.

The agency did not reveal how many seizures were made as part of the most recent raids, but in 2006, all of their raids netted a total of 219 arrests, 134 indictments and 170 convictions.

Showing 4 comments

guest at 3:56pm 2nd August 2007 Mod Chip is not worth. Federal is wrong. Many people are complain right now. Fix the rules back to normal. US can allow Mod chip for anytime and in the future need. Can allow copy games to friends and family only that you own.! Not to people, that is illegal. That can allow give free games copies to friends and family who are own. Can't copies games to unkown people that is illegal. I am upset little bit now. Please fix the rules back to normal!!!! God bless us.
guest at 3:56pm 2nd August 2007 Mod Chip is not worth. Federal is wrong. Many people are complain right now. Fix the rules back to normal. US can allow Mod chip for anytime and in the future need. Can allow copy games to friends and family only that you own.! Not to people, that is illegal. That can allow give free games copies to friends and family who are own. Can't copies games to unknown people that is illegal. I am upset little bit now. Please fix the rules back to normal!!!! God bless us.
Dima at 3:41pm 2nd August 2007 750,000 jobs?? For comparaison: the WHOLE I.B.M. employs only 322,000 people, Microsoft employs 71,000 people, and E.A.(a good-size game development house) employs only 3,600 people. Do they dare claim that Modchips cost the industry losses of the number of jobs equivalent to more then 200 good-size game-development companies?

Now on to profits. 200 billion per year to the "economy"? Assuming this is at 15% sales tax rate, this means that value of games sold altogether is about 1.33 TRILLION dollars. (I assume the sales tax goes "to economy" the rest goes to the game company). Even at $100/game, this is about 13.3 BILLION game sales losses per year, or about 36,529,680 game sales losses PER DAY. To put this in context: if EVERY USA resident has a game console, this means that EVERY day one in eight pirates a game...

I would like to have a chat with the math teacher of whoever came up with those numbers...
GregOrY at 1:47pm 2nd August 2007 The lost revenue numbers are ridiculous. It's amusing that they think the alternative to pirating software would be for people to actually pay for all the games that they've downloaded, copied, etc. I guarantee the alternative would be to not buy them at all.