Business ramifications of piracy *spawn

[Shifty Geezer]

The "freedom of speech" card is a weak cheat IMO. Freedom of speech means freedom to express yourself without oppression, not freedom to pass on whatever information you may want even if that info is someone else's work! The issue here isn't and never was freedom of speech, but whether Geohotz has rights to the information he has or whether that was protected via copyright or otherwise dangerous meaning it wasn't his to pass on.

 

[baten]

This lawsuit seems like a desperate attempt from somebody inside Sony organisation to hang to his/her chair.
For having suffered the worst hack in history, heads should be rolling French Revolution style at Sony, starting with top management.

 

[Squilliam]

So since they hacked off the hackers I expect two things.

1. They just painted a target on the PSP2 for swift hacking.
2. A user friendly hack your PS3 program will probably emerge in very short order.

I don't see how they've really helped themselves.

 

[Silent_Buddha]

Groklaw has picked up on the lawsuit:

http://www.groklaw.net/article.php?story=20110112115731533

Yeesh...

By working together, cooperating with one another, expressing a common interest, publishing instructions and demonstrations that induce and encourage fellow Defendants to engage in the unlawful conduct alleged herein, and by ratifying fellow Defendants' unlawful conduct by announcing such conduct with approval and encouraging the furtherance of such conduct, Defendants joined and participated in tortious scheme to commit the acts alleged herein in furtherance of a conspiracy.

That allows them to add anyone that has helped, expressed positive encouragement of the actions, has used any of the hacks, has made a comment in a forum, twitter, or blog that may have been used in futherance of the hack by those directly responsible for the hack, etc. to the lawsuit.

So, potentially, Sony could add any forum poster, blogger, twitterer, or anyone posting in the comments of such to the lawsuit if they made a post that could be construed as approving of or encouraging the people that made the hack.

Wow, just wow... I think maybe it's time to reconsider my absolutely 100% brand loyalty to Sony with regards to digital cameras and camcorders. Going after the people who hacked the system and perhaps the people that directly contributed to the hack of system I can see. Adding in verbiage in the lawsuit to potentially draw in anyone that said anything, anywhere that may be construed as approval or encouragement of those hacking the system or the hack itself, however, is absolutely absurd.

I doubt any judge would condone or approve of the last bit, but just the fact that Sony is considering going that far is preposterous.

Regards,
SB

 

[deathindustrial]

The PDF of geohot's lawyer's filing is worth a read.

http://www.thesangreal.net/gaf/hotz.zip

From the introduction:

This case is not about Sony Computer Entertainment America LLP (“Sony”) attempting to protect its intellectual property or otherwise seek bona fide relief from the court. Rather, it's an attempt for Sony to send a message to any would-be individual that attempting to use any hardware it manufacturers in a way it does not deem appropriate will result in harsh legal consequences, irrespective of any legal basis or authority for such action. It is for this reason that Sony filed a motion for ex parte protective relief, complete with numerous misstatements of fact and law, and providing Mr. Hotz, who is a resident of New Jersey, with a copy of the documents mere hours before a preliminary hearing for this matter was set in this Court in California, denying Mr. Hotz’s counsel the opportunity to file a properly-drafted response.

Cheers

 

[Squilliam]

Wow, just wow... I think maybe it's time to reconsider my absolutely 100% brand loyalty to Sony with regards to digital cameras and camcorders. Going after the people who hacked the system and perhaps the people that directly contributed to the hack of system I can see. Adding in verbiage in the lawsuit to potentially draw in anyone that said anything, anywhere that may be construed as approval or encouragement of those hacking the system or the hack itself, however, is absolutely absurd.

I doubt any judge would condone or approve of the last bit, but just the fact that Sony is considering going that far is preposterous.

Regards,
SB

Is this your 3rd boycott of a hardware product mentioned or have you boycotted other things as well in the time I have seen you posting here?

Nvidia then ATI and now Sony!

Im not attacking your boycott or anything it just seems crazy that here we are with another brand boycott. Power to the people, though it would probably be best if you write them a letter if you want your actions to be felt by them.

 

[dobwal]

This lawsuit seems like a desperate attempt from somebody inside Sony organisation to hang to his/her chair.
For having suffered the worst hack in history, heads should be rolling French Revolution style at Sony, starting with top management.

Yeah, it seems very desperate in terms of the claims against hackers by Sony, which is odd because Sony seems to stand on very strong ground in the US due to DMCA.

One can argue that due to exemptions existing in the DMCA in reference to video games and personal computer that hacking the PS3 is in no way illegal. But one would have a harder time convincing that the release of tools and or documentation based on those hacks isn't a violation of the DMCA.

What I find very odd is that DMCA exempts cellphones from most of the protections given to manufacturers of other devices. DMCA allows you to jailbreak iphone or root your Android based phones and freely distribute these hacks to run outside programs thereby opening these devices for use of pirated material without consequence.

I mean other than the function of making calls consoles, handhelds and Android based cells/Iphones are very similar in nature in terms of their software ecosystem. All are basically closed systems where the software that is allowed to run on these machines is mostly approved by the manufacturer. Why do consoles and handhelds deserve special protection?

I find it odd that the Sony will have two devices, one the PS3 that is protected from the distibution of hacking tools and documentation and the PSPhone which isn't protected from the same types of distibution. The only difference between the two devices is that a third party is charging one of the userbases for phone service.

 

[deathindustrial]

Why do consoles and handhelds deserve special protection?

http://www.newsmeat.com/billionaire_political_donations/Steve_Ballmer.php
http://www.newsmeat.com/ceo_political_donations/Howard_Stringer.php

etc.

Presumably the console manufacturers had better or at least more timely lobbying when it came to legislation that they wanted.

Cheers

 

[Rangers]

Yeah, it seems very desperate in terms of the claims against hackers by Sony, which is odd because Sony seems to stand on very strong ground in the US due to DMCA.

One can argue that due to exemptions existing in the DMCA in reference to video games and personal computer that hacking the PS3 is in no way illegal. But one would have a harder time convincing that the release of tools and or documentation based on those hacks isn't a violation of the DMCA.

Then why have Nintendo and MS not sued hackers?

 

[Shifty Geezer]

Then why have Nintendo and MS not sued hackers?

Perhaps they couldn't find a legal argument, but Sony's lawyers have found one? Bare in mind the law is a convoluted mess, and prosecution is more about finding a suitable precendent or parallel to make a convincing case. The leaking of keys is a new one, isn't it? If so, that may give just the ammo Sony needs to make a case that won't be instantly dismissed like a simple "we don't like it" argument might.

 

[Silent_Buddha]

Is this your 3rd boycott of a hardware product mentioned or have you boycotted other things as well in the time I have seen you posting here?

Nvidia then ATI and now Sony!

Im not attacking your boycott or anything it just seems crazy that here we are with another brand boycott. Power to the people, though it would probably be best if you write them a letter if you want your actions to be felt by them.

Pffft, I've personally eschewed far more companies during my life than just those. I'll wait to see who exactly Sony tries to pull in as defendants but the wording of their suit makes me rethink whether I'll remain brand loyal to Sony cameras and camcorders. I've never bought or seriously considered another brand prior to now.

Then why have Nintendo and MS not sued hackers?

I would imagine a combination of the cost and difficulty of prosecution combined with unique factors in each of those cases.

For MS with X360 a combination of a hardware hack and MS being able to limit potential damage through banning of consoles has kept the piracy there far lower than I would have otherwise expected. So the potential costs and difficulty of a lawsuit could be viewed as too high compared with damages resulting from the hack. As well a lawsuit by MS would receive considerable media coverage and encourage the already existing MS haters (which are not insignificant) to potentially embark on something similar to the whole wikileaks drama going on. And then finally, the firmware hack doesn't jeopardize system security or online sales revenue from Xbox Live. And the other hack that might have (JTAG) was shut down pretty quickly.

Nintendo sells all its hardware at a nice profit. So already the potential damage to Nintendo is reduced. Plus with the relative ease of hacking the system to run pirated material, they may not have wanted to draw attention to the hack through the media. And it's unlikely a lawsuit would have brought a stop of the hack even if it was successful. They also have far less invested in online revenue generation compared to either MS or Sony.

Sony until relatively recently had been selling at a loss and even now I doubt margins on the PS3 are all that good. So like MS they are greatly reliant on software sales for their console revenue. Unlike the DVD firmware hack on X360 however, this potentially opens up the entire system. Allowing easy pirating of not only physical media games, but also anything and everything sold through PSN.

Sony may have decided that the potential damage to them from this hack was greater than potentially spreading word of the hack through media coverage as well the cost of the lawsuit.

As well they may feel that if they can get this done before a fully working hack is released they may be able to prevent the release of a fully working hack. I think that's doubtful however. It'll just go underground with hackers protecting themselves as much as they can similar to how hackers operated during the Xbox timeframe.

The cat is out of the box, and it's just not possible to stuff the cat back into the box.

Regards,
SB

 

[deathindustrial]

I think the lawsuit is more likely a side effect of the management culture at Sony. I cannot help but think that the behaviour by them here with this lawsuit against geohot (and anyone else they decide to target) mirrors the that of their rootkit debacle back in 2005. So once again it is suddenly cool to hate on Sony.

One of things that is interesting in geohot's response is that he says he has never knowingly signed up for a PSN account so those terms and conditions presumably do not apply to him.

Cheers

 

[dobwal]

Then why have Nintendo and MS not sued hackers?

I don't know. Maybe it has to do that fact that all the PS3 hackers have been pretty transparent about their identities and are relatively well known at this point.

Or maybe it the fact that suing hackers isn't going to be all that lucrative if you win. However, you set yourself up for a terrible precedent if you lose, so the risk versus reward is heavily skewed toward not suing.

Maybe Sony, is so heavily invested into the protection it created for the PS3 that it feels the need to sue.

I still find it funny that the DMCA in nature allows for jailbreaking an iphone but not an ipad. Both relatively the same in hardware and software with the only difference being the ability to call someone and form factor.

 

[Shifty Geezer]

Okay, here's a novel and wild idea for you all to chew on. If the hackers in this case are cleared, and their actions deemed acceptible, doesn't that open the door for one company to develop software for a rival platform? eg. MS could create an XNA framework for PS3 and NXE FW and open it up to Live!. Provide it free of charge, support Kinect, offer a couple of freebie games to get people to install it.

 

[Laa-Yosh]

What's in it for MS? Can't see why they'd invest money in it...

 

[Silent_Buddha]

There would be a possible benefit for software distribution. But I don't think any benefits would outweigh the substantial, IMO, drawbacks.

1. It only lasts as long as the current generation.
2. Related to 2, you'll have potentially boosted the attractiveness of the platform which gives it momentum going into the next generation which you are locked out of.
3. Boosting popularity of a competing platform by offering software or features exclusive to your platform may slow sales of your console and potentially slow software sales of physical media, thus impacting bottom line.
4. Boosting poularity of your competitors platform is increasing the perceived competition you'll have going into the next generation.
5. Opening yourself up to potential lawsuits. If you have used any tools or trade secrets held by Sony and only available to contractee's, you're in trouble. If you haven't you won't get dinged but it'll still be a costly defense. Not to mention the potentially bad publicity.

I think something like this would only be useful for a player that is significantly behind and didn't see much prospects of making a profit on their own console. Oh wait, Sega comes to mind there. And as with Sega at that point it'd be better to just become a software developer and ditch console developement.

Regards,
SB

 

[dobwal]

Okay, here's a novel and wild idea for you all to chew on. If the hackers in this case are cleared, and their actions deemed acceptible, doesn't that open the door for one company to develop software for a rival platform? eg. MS could create an XNA framework for PS3 and NXE FW and open it up to Live!. Provide it free of charge, support Kinect, offer a couple of freebie games to get people to install it.

They probably could, but it would akin to spiting their face by cutting of their nose. Your competitors would likely follow suit and both or all three of you would have a compromised consoles while vying to extract profits from the hacker/pirater crowd on someone else's hardware (I equate that with trying to sell music/movies on limewire). I don't see how thats hardly appealing for any console manufacturer.

 

[lilbroK]

One thing that piracy defintely increases is hardware sales. I know many who bought a DS just because they heard of the R4 chip and many who bought a PSP because they heard of CFW. I have also encountered those who bought a PS3 because of the jailbreak dongles. Then there is the boy I knew who played pirated games on his 360. His 360 got banned an he immediately went out and bought another one just so he could play on Xbox live. Even when he did burn a game he would still buy it so he could use it on live without getting banned. That equaled to extra profits for Microsoft.

These people previsouly had no intent to get the system so the piracy equated to a system sale that the company would have never gotten otherwise. I remember back a long time ago when this guy saw me playing a GBA game on a PC and went and bought a GBA and that game because of it.

I myself would not have gotten into mecha if I had not seen my friend playing a game he acquired from someone overseas.

 

[dobwal]

One thing that piracy defintely increases is hardware sales. I know many who bought a DS just because they heard of the R4 chip and many who bought a PSP because they heard of CFW. I have also encountered those who bought a PS3 because of the jailbreak dongles.

These people previsouly had no intent to get the system so the piracy equated to a system sale that the company would have never gotten otherwise. I remember back a long time ago when this guy saw me playing a GBA game on a PC and went and bought a GBA and that game because of it.

I myself would not have gotten into mecha if I had not seen my friend playing a game he acquired from someone overseas.

One thing that piracy defintely decreases is third party developer presence in the market (I don't believe that in all cases but neither do I believe that piracy increases hardware sales in all cases). We've seen developers who cut their teeth and gained their name on the PC basically shun the PC market or treat it like a red headed step child now. The PSP isn't the poster child for third party support and the DS is mostly dependent on Nintendo wares.

The console and handheld business model is mostly dependent on software being the primary profit generator. The profit generated by just console sales probably wouldn't warrant the level of investment and risk these companies undertake to compete in console gaming. Who wants to spend a $1 million just to make $1 dollar.

Piracy is tolerable on any console or handheld up to a point. But there is a threshold where piracy can have a negative effect on developers and thier software sales and ultimately have a negative affect on a console ability to be successful.

 

[lilbroK]

One thing that piracy defintely decreases is third party developer presence in the market (I don't believe that in all cases but neither do I believe that piracy increases hardware sales in all cases). We've seen developers who cut their teeth and gained their name on the PC basically shun the PC market or treat it like a red headed step child now. The PSP isn't the poster child for third party support and the DS is mostly dependent on Nintendo wares.

The console and handheld business model is mostly dependent on software being the primary profit generator. The profit generated by just console sales probably wouldn't warrant the level of investment and risk these companies undertake to compete in console gaming. Who wants to spend a $1 million just to make $1 dollar.

Piracy is tolerable on any console or handheld up to a point. But there is a threshold where piracy can have a negative effect on developers and thier software sales and ultimately have a negative affect on a console ability to be successful.

Its kind of hard to reply to this due to the way that you altered the context of my post(the word ALL was never used).

Good games still sale well even if there is heavy piracy. The Wii has the worst piracy right now but third party support was never strong for it even before piracy. Well made third party games still sell well on the system despite the tremendous piracy.

People were pirating 360 games before the Wii even came out but look at all of the million seller third party games on it. Piracy does make it hard for bad developer though because people get to sample there game and find out how horrible they are before playing them. Most games PSP were bad and the good ones did sell well in the U.S.

Most major studies(the ones not funded by the pirated industries themselves) found piracy increases sells for companies. If nothing else it equals free advertising.

Then there is the fact that most games in existence are out of print. People would never get to play a lot of old Sega Genesis games and SNES games if not for piracy. Then they get hooked on the old 2D version and go out and buy the 3D version and remakes of them.

You are forgetting this one fundamental fact that has me wondering why it is called piracy. Pirate take from other and actually cause a loss. People who download games don't take anything from the company. Everything it had before it still has. You can not force people to buy a product and most of them only downloaded most of the games they downloaded because they were free. In other words they would not have bought them if they were not free.

Software piracy is mostly a scapegoat for bad sales.