Lots of people will come with pitchforks in hand, saying that I am defending pirates, those are missing the point completely, I am not talking about them. Others will come with scythes, trying to harvest from me that the problem is that now anyone can cheat on games (and pirate). Those, don’t realize too what it is at stake for Sony.
In 1983, the market crashed, Atari, the leader in console business, acted like an ass toward their own developers, leading them to quit, and create Activision. Atari sued Activision when they created a Atari game, and lost. Suddenly, hundreds of companies appeared from nothing, like the 2001 internet companies surge, there was in 1983 a game development surge, but the result was disastrous, a huge amount of shovelware, soon when you visited a video-game store, 99% of the games on the display would be utterly crap.
This, coupled with some mistakes from Atari and competitors, caused a market crash, the console game market just died. Nintendo came to rescue us all, enforcing a very strict policy where to make a game for them, you needed to follow very strict guidelines, and had a limit on how many games you could submit every year, meaning that only the best games would get on the system, of course, several crap games showed up, but the ratio was bearable to costumers, if you picked a random cartridge on the store, probably the game was decent enough.
A whole business model came from this, soon all console manufacturers started not only to build gates and guard them, but they also figured they could put toll booths on them, you want make a PS3 game? You have to license some stuff, pay some fees, buy SDKs and debug machines… Some manufactuers even ask for royalties, meaning that every game sold, give them a little money, but when summed all games sold ever, it means humongous amounts of money. All this, allow the payment of the research and development of those marvelous machines.
So, returning to the present, what happened to PS3? First, hackers started to figure how to use the RSX (PS3 video chip) on Linux, something that was not available, but developers pursued, in attempt to make cool stuff. Suddenly, Sony removed the “OtherOS” option. Many people misunderstood, thinking what Sony feared was piracy, but that would make no sense, OtherOS only allows to run another Operating System, a game is NOT a Operating System, to make a pirated game run using OtherOS would be harder than many of the other ways.
The hackers got upset with OtherOS removal, Sony took from them the toys that they bought, it is like if you sold a car, and then popped the tires after the costumer picked it up. Their solution? Put it back. Of course, this started a battle of hackers putting it back, and Sony removing it again. Soon they needed a final and ultimate solution, a way to put OtherOS back permanently.
This proved to be possible, thanks to Sony crap security, when you use cryptography you are supposed to use random numbers, but Sony random number generator is not quite random, allowing the hackers to use simple math and observation skills to figure the key. And then one of them, published that key on internet…
Like those videogame bosses, where they have a single weak point, and if you hit it, the creature starts to scream, flail, yell and smash random stuff and cause lots of collateral damage, that is what happened, the key, a number, that in many situations would be meaningless, is the key to Sony gate, the gate that have a toll booth, with that key, anyone can create any software they want, and ignore Sony demands for fees, suddenly a great source of income for Sony is in danger.
What Sony fears, is that people will figure that with the key, they can make their own PS3 games, and that what happened in 1983 will repeat on the PS3, as soon as a great homebrew game show up and actually gather sales, a new surge of PS3 development will happen, and soon there will be thousands of PS3 games, completely drowning the market in shovelware, and causing Sony to don’t see a dime of it.
THIS is why Sony is insanely upset.