Why Hackers are Ruining the Industry

Why Hackers are Ruining the Industry



Hackers have recently become the subject of much discussion, partly because of the exploits of George Hotz and his band of brothers who are responsible for finding and exploiting the PS3's hardware key. The exploits of Hackers have been popularized in film (Hackers, Tron [1982]) and on television. They've even garnered the attention of the U.S. Senate, among other government organizations and officials. But, who are they? What motivates a hacker, and what effect have their activities had on the game industry specifically? We aim to find out.

Why Hackers are Ruining the Industry

As defined by Wikipedia a hacker is a person that fits "one of several distinct (but not completely disjointed) communities and subcultures":

  • "The hobbyist home computing community, focusing on hardware in the late 1970s (e.g. the Homebrew Computer Club) and on software (computer games, software cracking, the demo scene) in the 1980s/1990s. The community included Steve Jobs, Steve Wozniak, and Bill Gates and created the personal computing industry.
  • "A community of enthusiast computer programmers and systems designers, originated in the 1960s around the Massachusetts Institute of Technology (MIT)'s Tech Model Railroad Club (TMRC) and MIT Artificial Intelligence Laboratory. This community is notable for launching the free software movement. The World Wide Web and the Internet itself are also hacker artifacts. The Request for Comments RFC 1392 amplifies this meaning as '[a] person who delights in having an intimate understanding of the internal workings of a system, computers and computer networks in particular.'
  • "People committed to circumvention of computer security. This primarily concerns unauthorized remote computer break-ins via a communication networks such as the Internet (Black hats), but also includes those who debug or fix security problems (White hats), and the morally ambiguous Grey hats."

    Part of what motivates hackers can be seen in this very simplified breakdown. Also worthy of our consideration is "The Hackers Manifesto." It states, among other things, that it is the hacker's responsibility to make sure information, and by extension the world, remain free. That this is, in general, the hacker's overarching goal is confirmed by the activities of some of the prominent members of the community.

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    Interestingly when referred to by mass media the meaning that's almost universally inferred is the third (black and grey hats). This subculture and its various groups have motivations that set it apart from the other two. Grey hats (or gray hats if you prefer), who fall somewhere between white hats and black hats, are probably the most difficult to define of this particular subculture. The reason for that has to do with their method of operation. According to the Wikipedia entry, grey hats may sometimes cross the legal line in order to discover a vulnerability or may disclose the vulnerability unethically.

    For the sake of simplicity let's consider George Hotz. Under this definition, he may fall on the darker side of the spectrum if he were to be classified as a grey hat, especially considering the manner in which he revealed the PS3's security exploit, not to mention the iPhone-related news items.

    Why Hackers are Ruining the Industry

    But do hackers really do the games industry that much harm? In a word, yes. A study conducted by the Computer Entertainment Suppliers Association (CESA) concluded that between 2004 and 2009, Nintendo and Sony lost $41.7 billion to piracy related to the DS and PSP, respectively. The Association of UK Interactive Entertainment (UKIE) estimates in a recent report that for every game that is purchased legitimately, four are obtained illegally. At a 1:1 ratio UKIE estimates the annual cost to the industry is $2.4 billion and 1,000 jobs. If we apply that 1:4 ration of legal copies to illegal ones to the latest Call of Duty, for instance, we begin to see the impact. In the first day of its availability, Black Ops generated $360 million in sales. That would mean that $1.66 billion was lost to pirates. In one day.

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