Modders have always been the bane of a console maker's existence. You see, due to the high cost of cutting edge equipment, manufacturers often sell their consoles at a loss, thereby subsidizing the cost (unless your company name starts with an "N" and ends with "intendo"). The idea is to offer a more attractive price on the console, and then make the money back through accessories, licensing, and software sales.
The reason manufacturers despise modders, however, is because once a console has its security features disabled, you can easily play bootleg (translation: illegal) ROMs downloaded from warez sites. For the consumer, this means free games. For the manufacturer, this means no opportunity to make back the cost of the console, or earn a profit.
Console makers have tried to thwart modders for years, first through design revisions, and then through firmware updates on the disks. But now, thanks to the power of the internet, firmware upgrades can be delivered right to your console, any time the manufacturer wants to send them. And for MS, that time is now.
Reports are coming in from all around the web that Microsoft has begun blocking consoles that are detected as "modded" from its Live service, essentially cutting off users from updates, downloads, and multiplayer games. And, perhaps most importantly to MS, the Halo 3 beta. Make no mistake, the timing of this act was no coincidence.
So far, Bungie has denied any involvement or knowledge in this, and that's probably the truth. MS controls the reins on Live, and can do what they want. They even have a certain amount of control over a publisher's content, so Bungie would likely have no right to object to this action, if they were informed of it at all.
So what's the big deal, right? If people mod their consoles, they're obviously cheating in games or running hacked ROMs, right? No. There are many legitimate reasons to mod a console, and no console has been modded more famously than the original Xbox, through a project known as the Xbox Media Center, or XBMC. This mod allowed users to turn their Xbox into a very powerful media device, capable of playing back just about any digital content you can imagine - including perfectly legal music and movies.
The 360 modding scene hasn't taken off yet, due to some extra security built in to the console to purposely make mods more difficult to implement. However, workarounds have already been discovered, and it's only a matter of time before hackers find a way to do some amazing things with the console - they always do.
The fact is, Live is Microsoft's walled garden, and they can do what they want. They've done this kind of thing in the past with the original Xbox, and have publicly stated on numerous occasions that anyone caught using a modded console on the Live service would be banned. So, users know that they are operating at their own risk. Still, that doesn't really make the situation fair. I'm all for kicking out the cheaters and keeping the playing field level, but there are better ways than to ban people that are simply trying to enhance the user experience with their console.
Perhaps the most disturbing point in all of this, however, is that MS is not publicly advertising how users that have been incorrectly flagged as modders can get their Live access reinstated. If this program is anything like Microsoft's Windows Activation and Validation system, there are going to be some errors, and these people will simply be left out in the cold. So, if your console has not been modded and you've still been banned from Live, contact Xbox support at 1-800-4-MY-XBOX, and give the rep an ear full.
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