The profitability of Microsoft’s Xbox console may be under threat from the development of mod chips and an increase in pirated games. The problem is said to be more prevalent in Europe where Xbox owners are using mod chips to play pirated games only currently available in the US market.
Mod chips are pieces of hardware soldered into the Xbox console, which allow users to play pirated games burned onto CD or DVD discs. The chip also lets users run PC type software. The mod chip disables the Xbox’s inbuilt security features, allowing users to play pirated games. The first Xbox mod chip to be made available commercially went on sale last month through a number of specialty retailers such as Lik Sang of Hong Kong. Instructions on how to construct homemade Xbox mod chips are also being posted on the Internet. Homemade mod chips are being made by combining programmable EPROM memory with an altered version of the Xbox’s BIOS.
Analysts believe that the mod chip poses little threat to Microsoft at present, as few Xbox console owners would risk the complicated installation of the chips. However, if the development of the mod chip continues and the chip becomes easier to install, the Xbox’s profitability could be seriously affected.
Microsoft is said to be planning a crackdown on pirated games and chips. The company is rumoured to be investigating the legal options it has at its disposal to stop the development and distribution of mod chips.