Piracy may drive up hardware sales because obviously, you need to buy the console before you can play backups. But increase in hardware sales without an increase in software sales is not necessarily a good thing. Just take the case of the psp.. custom firmware has made it easily accessible for any average person to play pirated games without a hardware mod. Software sales for the psp are abysmal save a few exceptional games even though hardware sales for the psp still remain strong. Now less and less developers are making games for the psp because they don't want to lose money.. Bottom line people need to buy games for game companies to make money and if no one buys games for a system, the companies won't make games for that system. And that is very bad for any console. The dreamcast went under soon after the backup loader was released which allowed users to play backups without any modchips..
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