We’re a bit late catching on to this story, however, due to its level of importance, we cannot avoid publishing it. As most are already aware, Federal Agents working with the ESA recently raided mod-chip outlets across 16 states in the U.S.A. this past week. The problem is, was it worth it?
As is the general sentiment, we’re not too thrilled that our tax dollars are being wasted on busting guys who chip an Xbox so they can use XBMC (Xbox Media Center). While ICE and the ESA seem to be pretty proud of themselves, respectively touting comments such as:
The search warrants were executed at businesses, storefronts, and residences located in California, Florida, Hawaii, Idaho, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, and Wisconsin at locations associated with subjects who are allegedly involved in the direct importation, installation, sale, and distribution of the devices that are of foreign manufacture and smuggled into the United States.The modification chips and circumvention devices allow users to play illegally obtained, pirated and/or counterfeit software on video game consoles including Sony’s Playstation 2, Microsoft’s XBOX and XBOX 360, and Nintendo’s Wii. Modification chips and swap discs for gaming consoles violate laws under the Digital Millennium Copyright Act of 1998 (DMCA). According to the Entertainment Software Association (ESA), the makers of the gaming consoles, game developers, and others in the industry have incurred billions of dollars in losses worldwide due to sales lost to those selling counterfeit and pirated video games.
Counterfeiting and piracy is estimated to cost the U.S. economy between $200 billion and $250 billion annually and results in the loss of up to 750,000 jobs according to the U.S. Chamber of Commerce.
“Illicit devices like the ones targeted today are created with one purpose in mind, subverting copyright protections,” said Julie L. Myers, Assistant Secretary of Homeland Security for Immigration and Customs Enforcement. “These crimes cost legitimate businesses billions of dollars annually and facilitate multiple other layers of criminality, such as smuggling, software piracy and money laundering.”
and,
Plain and simple, selling and distributing products to illegally bypass game consoles’ piracy protections is a crime with real-life consequences. This is not a game; we’re talking jail time. Enforcement initiatives of this scope send a clear message to both the public and pirate community that this illegal activity will not be tolerated.
Our problem with this is that they chalk up the creation and sales of Mod-Chips right next to “Money Laundering” and “Smuggling”. How does a mod-chip ‘facilitate smuggling or Money Laundering’? Of course it has the potential to be used for illegal purposes such as software piracy. But given that there are legitimate usages out there for such a product, that is the equivalent to making the manufacturing and purchase of a knife illegal because it can be used to cause bodily injury and/or death. Despite what the ESA may say, it is not that plain. We also doubt that the numbers given for industry loss are entirely accurate as most figures when people refer to piracy have been shown in the past by independent researchers to be heavily bloated.
I was personally tickled in fathoming how effective the seizure of a grand total of one single mod-chip was.
