When hacking group fail0verflow and iPhone hacker George "GeoHot" Hotz unveiled how to hack the PS3 last week a firestorm erupted at Sony. The latest salvo in this new disaster for Sony is legal in nature. Sony has filed temporary restraining orders against the hackers in an attempt to stop them from distributing the hack. Hotz posted the documents on his own site.
The documents claim that he hacks violate DMCA (Digital Millennium Copyright Act) claiming pirated games are already being packaged and distributed. Hotz, meanwhile, doesn't seem worried and is a little disappointed in Sony saying, "I would expect a company that prides itself on intellectual property to be well versed in the provisions of the law, so I am disappointed in Sony's current action." He goes on further to say "I have spoken with legal counsel and I feel comfortable that Sony's action against me doesn't have any basis."
Sony has not responded to these hacks with mandatory firmware updates. Others seem disappointed in their current action instead of the updates, but in reality a firmware update would do nothing to a hacked system, which, because the hack works on the root key, can be reversed almost as soon as installed. In fact, because of the nature of the hack, there is no software update that can stop it or fix it, because it is coded into the hardware. Sony can fix consoles still in their possession and at the factory, but to those out in the wild there is no fix.
I don't wish to be alarmist, but there might be more here than simply pirated software. Because of the network nature of the PS3 it might be possible to use one and hack into someone else's PS3. The above hackers in question are more interesting in the ability to hack the system itself rather than anything they can do with it. But others may use it in more unscrupulous manners. We do not know the extent of the hack's ability. I have heard talk of being able to read/steal/alter information on another person's PS3. This is unconfirmed in any way shape or form and is merely conjecture, but a disturbing possibility nonetheless.