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These devices permit the use of unauthorized or pirated software. Use of such devices or software violates the terms of the “System Software License Agreement for the PlayStation 3 System” and the “Terms of Services and User Agreement” for the PlayStation Network/Qriocity and its Community Code of Conduct provisions.

Violation of the System Software Licence Agreement for the PlayStation 3 System invalidates the consumer guarantee for that system. In addition, copying or playing pirated software is a violation of International Copyright Laws.

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Finally a statement where they separate both things, because hacking a system that you own is not illegal, it violates the agreement invalidating the warranty (which is a well known risk and if someone using a system hack doesn't know the risk, he deserves a bricked system) but it's not illegal... The illegal part is the violation of copyright laws...