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A modification chip or modchip is a device used to play import, backup, or homebrew games and/or circumvent the digital rights management of many popular game consoles, including the Xbox, PlayStation and GameCube. more...

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Almost all modern console gaming systems have hardware-based schemes which ensure that only officially sanctioned games may be used with the system and implement regional lockout similar to the scheme used in DVD movies. The specific technical nature of these DRM systems varies by system, and may include cryptographic signing (Xbox), intentionally unreadable sectors (PlayStation, Sega Saturn), custom optical media (GameCube, Dreamcast), or some combination thereof. Modchips are available also for some DVD players, to defeat region code enforcement and user operation prohibitions.

Modchips typically require some level of technical ability to install. Most commonly, modchips must be soldered on to a console's motherboard, although there are no-solder install kits (which instead rely on the precise positioning of electrical contacts within the case) which work with some revisions of the PlayStation 2 and Xbox hardware.

Early Development

Modchips first came into popularity with the original Sony PlayStation and were developed for playing import games. They worked by simply injecting the region code of all three available regions into the appropriate data stream, and had the side effect of enabling users to play copied games.

The name 'oldchip' itself appeared first in early 1996 and was coined by Old Crow, a member of the PlayStation modding scene. The original modchip was programmed by a western engineer under contract for a Hong Kong company and was based on the PIC 16C54 microcontroller. Prices dropped when Old Crow reverse-engineered it and released the source code to the community for free. Later versions made some concessions to copyright law by only allowing legal copies of games to be booted.

Disadvantages of modchipping

Aside from being potentially illegal, a poorly installed modchip can cause permanent damage to the console, potentially rendering it useless. Some consoles cannot be used for online play if a chip is installed, such as the Xbox's Xbox Live service (Most if not all mutiplayer network games can be tricked into being played over the internet by using software that was designed to do such, this does not require a modded console though). Also some games do perform a check whether a modchip is installed and do not run if they find one. Therefore, some modchips have an enable/disable switch. Modchips are also generally more expensive than other methods, while boot disks and other methods to achieve the same basic functionality are often less than $30 USD, or softmods which are usually available for free. Opening a console, which is necessary to install a chip, will usually terminate any manufacturer's warranty it may have.

Read more at Wikipedia.org