Petulant Microsoft blogger Ozymandias tackles modding in his latest post.

He breaks down the reason people mod consoles into three arguments (the ability to copy and play pirated games, the ability to play import games, the ability to add new functionality (such as running homebrew software) and then proceeds to argue why none are valid.

Piracy he dismisses out of hand, and rightfully so. It's wrong and if you do it, there isn't anything that can be said to make you change your mind.

Importing he dismisses just as quickly by saying essentially that game developers should have the right to control who plays what when. I couldn't disagree more.

Finally, Ozy sinks his teeth into the third issue: adding functionality and running homebrew software. While I don't agree with his conslusion, I do see his point. Here's a taste:

The console business is a razor/razor blade model. Hardware (the console) is subsidized (meaning Microsoft sells it at below cost) to make it easier for consumers to get it into their homes. The business then makes this up by selling you additional hardware (peripherals), software (games), and services (Xbox Live). The success of this razor/razor blade model is tracked by analysts as the "attach rate," or how many of these add-ons an average person might have per console. (The most common metric you'll see tracked is the game attach rate to a console, but some analysts also track the attach rate of peripherals and Xbox Live.)

Over time you buy games (and other peripherals and services). The revenue generated from those purchases helps to make the business a profitable one (which is the reason you see a healthy game industry, and continual investment in new features, games, and hardware). Some folks point to the fact that they bought the hardware and believe they should be able to do anything they wish with it. Unfortunately, this argument ignores the fact that they're buying that hardware at below cost, and it's the razor/razor blade model that makes it even possible to buy at that price. The other solution would be to sell the hardware at a price that covers cost and also includes a profit margin so that selling the console alone (with no game/peripheral/service sales) could be a stand-alone business. Problem is A) this model already exists (it's called a PC), and B) selling a console at PC prices (especially with the capabilities the console has in it) would simply be too expensive and no one would buy it. At the end of the day, the cost difference needs to be made up somewhere, and that's why we need to you buy those razor blades.

The interesting thing to me is that I think the idea of homebrew/user-created content is looked at with much interest at Microsoft (we are a software company after all), but the challenges caused by the impact to our business model make it very difficult to enable. Interesting tidbit: a friend of mine at Microsoft once demonstrated a modded PSP to Bill Gates and showed off all of the interesting things that enabled. According to my friend Bill was intrigued and asked the audience what we might be able to do to encourage this sort of thing without damaging the business. I love that our top executives think this way - the challenge, of course, is that modchips allow much more than just homebrew software, and so it's a tough problem to sort out.

What are your thoughts? How would you defend the three arguments, or would you?

On a totally unrelated note, does anyone else find it ironic that the name for Microsoft's angry, attacking blog is Ozymandias? Brian Crecente

The Problem With Modchips [Ozymandias]