The 14-page user agreement and privacy notice included with the first Xbox Live kits sent to beta testers specifies that Microsoft reserves the right to revoke Xbox Live privileges for anyone with a hacked Xbox and to scan consoles on the network to enforce its rights.
A handful of gray-market Xbox mod chips have gone on sale in the past few months. Once soldered onto the Xbox's main circuit board, the chips disable various copy protection measures, allowing the machines to run legally or illegally copied discs, imported games and unlicensed software. Numerous hacking projects have emerged to use the chips to adapt Xbox units for use as media players and Linux boxes.
Although Microsoft has said it will take legal action against any modifications that infringe on its intellectual property, a representative for the software giant said last month that Xbox Live, the upcoming online service for the console, would not be used to detect modified consoles.
Yet language in the initial Xbox Live user agreement appears to allow Microsoft to do exactly that. It states: "Xbox Live may only be accessed with an unmodified, except for Microsoft authorized repairs and upgrades, Xbox video game console. Any attempt to disassemble, decompile, create derivative works of, reverse engineer, modify, further sublicense, distribute or use for other purposes either the hardware or software of this system is strictly prohibited."
The agreement further states: "Microsoft may...retrieve information from the Xbox used to log on to Xbox Live as necessary to operate and protect the security of Xbox Live, and to enforce this Agreement."
The privacy statement accompanying the agreement says information collected about specific consoles connected to Xbox Live will be used to update the console's software, protect the network's security and "protect and defend the rights or property of Microsoft."
Microsoft representatives did not respond to repeated requests for comment.
Xbox hackers seemed unconcerned with the potential for online snooping, saying current and upcoming mod chips offer a number of safeguards, including on/off switches and built-in software (firmware) that can be easily modified to bypass any new security measures.
"The newer mod chips...can already defeat any attempts by Microsoft to detect them, as they are firmware upgradeable via a PC parallel port," wrote British mod chip enthusiast Tony Dalton-Richards.
"I don't think this will affect modding very much," added Dan "SiliconIce" Johnson, founder of the XboxHacker Web site. "Mod chips can simply be switched off when the user wants to play on Xbox Live. That's if Microsoft even checks, which we are still not certain of."
Mod chips have turned into a sticky area of copyright law. Sony, whose PlayStation 2 console is the target of close to a dozen mod chip makers, claims the devices infringe on its rights to enforce copyrights. Yet recent legal decisions have cast doubt on such arguments.
Issues surrounding the Xbox have centered on the machine's BIOS, the basic software instructions that govern the operation of the console. Some mod chips appear to use a modified version of Microsoft's BIOS, while more recent attempts have been based on original BIOS constructions.
The above named are currently in the process of shutting down websites dedicated to the development and expansion of gaming consoles.
Rewarding governments substantial money to create legislation (in all parts of the world) dictating the congolomerate's wishes and enforcing the law to its limits.
Many people across the globe choose to duplicate or back up there investment to avoid the risk of damage beyond use.
The driver for this action is to reduce the chance of the disc becoming damaged beyond use - which is fair given the cost of owning each game is substantial
(usually $99.95 for each game http://www.xbox.com/au/Games/catalog.htm).
Each of the gaming houses do not want consumer's to duplicate games because it would reduce one of the many revenue stream's available.
The revenue stream in question are customers who buy games more than once because the discs become damaged beyone use.
It is unfair and immoral to expect the gaming community to be restricted of simply playing a game that has been purchased off the shelf and not duplicating it or playing a game from another country such as the great America.
The fact is, all types of removable media such as video tapes, cd's, dvd's, cassette tapes, ect can be replaced with a Hard Disk Drive, who's life is far greater than the common Disc. The data signal can be sent to any form of electronic device such as your television or stereo system.
We are only a small step away from our pc's becoming a "server" for the common house. We will no longer require DVD, Cassette, CD, Video players as our computers will replace these appliances and right now corporations are exploiting these products before a shift occurs.
The very fact corporates chose a disc as a means to sell media illustrates they did so because it was in there interests. It would not be in there interests to sell media in the form of a hard disk simply because it will last many years longer than a disc.
Throughout the world piracy is a huge issue.
Predominantly in asian capitals the trend has spread to Western and Communist society's.
The trend has not been because there is a "criminal element" in each person but because the games are simply over-priced.
It is unfortunate piracy exists in all pockets of the world, however it is not the responsibility of the gaming community but the responsibility of enforcement agencies and companies selling games.
Enforcement agencies should be doing more to combat piracy and gaming companies should reduce games to an acceptable price.
Our society is based on democracy, freedom of choice and expression, however and alarmingly corporations are continually re-writing legislation with the government to suit there interests.
Xbox (Microsoft) are determined re-instate the amendments the ACCC reversed by threatening OUR government of withdrawal from the Australian market.
This strategy is a form of dictatorship and goes against the very foundations of our Western culture.
The time has come to return power to the consumer and tell these corporations not to interfere with Australia's legislation or politics and
enter the Australian market arena if you do not want to operate fairly.