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ameratsu said:
Something I see neglected in here is the fact that some people buy hardware because they know that they can modify it to play copied games. A large part of their reasoning for paying asking price for the hardware is that they don't need to purchase games so there is no ongoing cost. If you somehow make systems unhackable, I have hard time believing these people who previously only bought the hardware would suddenly become software consumers.

 

It wouldn't matter much.  Most of the profits for Nintendo, Sony, Microsoft, etc. come from software, not hardware.  And most developers aren't directly affected by hardware sales at all.