Hackers' breakthrough stands to "destroy" Sony's gaming business

Hackers made some serious headway earlier this month in circumventing the built-in security measures in PS3 hardware, ultimately leading to a group called fail0verflow as well as famous iPhone jailbreaker George Hotz himself devising a means to run unlicensed software on the console.

The secret lies in cracking the code behind the PS3's ability to detect what sort of software it is allowed to run; reverse-engineer what should have been a completely random code (hint: it wasn't really), and you now know how to fool the PS3 into running whatever you want it to run.

Hackers like Hotz are swearing it is simply their sacred duty to return the joys of running software like Linux on their PS3s after Sony decided no one should be getting some of that action again, but the doors are basically open like never before for things like game backups to be run on PS3s with no modifications to the console hardware required.

Because their workaround works deep into what is built into the PS3, there's reportedly no easy way for Sony to combat it short of releasing entirely redesigned PS3 hardware. Naturally Sony decided this group shot way past voiding-your-warranty territory and straight into lawsuit country.

Sony Computer Entertainment America yesterday filed suit against Hotz and the members of fail0verflow for circumventing the PS3's "technological protection measures", and requesting a temporary restraining order to get their dirty little secrets off the intertubes plus impounding any equipment used by the defendants in their research. According to Sony's legal documents:

"Unless this court enjoins defendants' unlawful conduct, hackers will succeed in their attempts to ensure that pirated software can be run on the PS3 system, resulting in the destruction of SCEA's business."

The console giant has also damned the defendants' efforts as a group "conspiracy" thanks to the team spirit involved, making each member equally liable for all acts. Speaking to GameSpot, Hotz believes Sony's retaliation (specifically their arguments) won't hold any legal water against all they seek to punish.

Update: Hacker group fail0verflow has also responded to Sony's complaint, now officially a full-blown copyright infringement lawsuit. Like Hotz, the members express their dismay with Sony's knee-jerk reaction, explaining their "exclusive goal was, is, and always has been to get OtherOS back", and that it has never "condoned, supported, approved of, or encouraged videogame [sic] piracy".

Meanwhile Hotz' confidence in his legal position stems from precedents already set in U.S. courthouses last July implying that "jailbreaking" is "fair use" under U.S. law, making it exempt from the ramifications of the Digital Millennium Copyright Act (DMCA). As it stands, Sony is seeking redress under the very same DMCA.