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Mod chips essentially allow you to do things that Nintendo apparently doesn't want you to do. For example, while I was working at a flea market around here, at the game stand, my boss would mod your PS2 for.....30 dollars, if I remember, which included the mod chip and a new clear plastic top-loader case, which came in like 4 colors. The ONLY THING that ANYONE used that for was to play pirated games. That my boss created and sold to them. His way around whatever laws are in place was to ask them if they already had a copy of the actual game, and then they would lie and say yes, thereby exonerating him. I worked there for 3 years, must've seen at least 50-100 people get their PS2 modded, and not ONE of them ever had anything on his mind regarding the mod except that he could now play pirated games he bought from my boss for 10 dollars instead of buying the actual game for 20-50 dollars.

Also, every game bought from anyone got copied to his hard drive at his house, which he would then use to make pirate copies with. He had virtually every PS2 and Xbox game ever made on his hard drive(s). And you wonder why Sony likes the fact that blu-ray is hard to copy. Or burn.