The now netorious Wiinha Chip (Is it real?)

Every console maker dreads two words, and those words are “mod chip”. Thus far, Nintendo has gone the extra mile (sometimes arguably to the detriment of its success) to stop hackers from modding its systems. The N64 was the last cartridge-based console, which drove up publisher costs so much that it’s often used as the reason why then-Squaresoft abandoned Nintendo for the fledgling Sony PSOne (or as geeks call it, the PSX). The GameCube then used proprietary Panasonic-developed mini-dvd rom, which again foiled most attempts to mod the machine, since the discs were not widely distributed and the GCN could not play regular sized discs (the Panasonic Q was likely halted from a stateside release to prevent widespread modding).

When it was announced the Wii would play regular sized DVDs, you have to think there were some basement hackers cheering and smiling. It didn’t take Hackers long to get the job done. The Wiinja (we REALLY have to stop with these stupid puns) has supposedly KOed the security of the Wii. In a video posted on YouTube (above), you can witness the player using what appears to be burned DVD Roms to play Wii games.

Should this be authentic, this now makes the entire library of Gamecube titles available to hackers the world over. For now, let’s presume this video is authentic and that the Wiinja chip is indeed real. The immediate reaction by Nintendo (and its loyal followers) might be to engage in direct legal battle to stop the modding as soon as possible. Nintendo might seek to release firmware updates to block its usage (much like how MS has sought to stop modding by id’ing it through its uber-popular Live service). This route may work, but given how few of Nintendo’s consumers are probably online in the first place, and the company’s relative inexperience in that department, it may not be the road to take.

Confronting modding is an interesting business in the videogame world. Undeniably, it creates a piracy channel for those willing to find games in the underground, but to look at modding as a means to an illegal activity is missing an entirely different side of the coin. Ken Kutaragi, the former head of Sony’s gaming division and father of the PlayStation, probably made a lot of publishing execs angry when he suggested that modding “helps” PlayStation more than it hurts it. And he’s right; as the console manufacturer, modding might indeed help early on. For Nintendo, it might do for the Wii what I think it did for the PSOne — and that’s rope in the hardcore and disbelievers.

PSOne was modded not long after its debut and some will admit that played quite a role in keeping the console afloat until FF7 royally crowned the console with then-obscene penetration growth. The Wii, for its success, is bringing in new gamers, but there is a hardcore that still refuses to pick up the console. The modding might just help the Wii capture that audience. Let’s face it, the only gamers who mod are the hardcore. Most consumers, the ones Nintendo goes after, probably have never heard of modding, let alone the notion of taking apart your console to weld something inside it. These are the same folks who would give you the oddest expression when you tell them, “Don’t send your iPod to Apple. Just buy a cheap iPod battery to replace the one inside it.”

Modders include gaming’s elite — and by that I mean the people who influence decisions. No editor of respectable gaming publications will admit to it, but most do indeed have modded consoles and even burned games. While I have seen no graph trying to map the value they bring, I don’t think it’s a far-fetched argumenbt to say their positive conversations do more good than damage to a console company. And we all know that in the world of consoles, penetration is the key to success. If you have enough of an installed base, the percentage of modders will be pretty much negligible — one of the reasons I believe why Sony doesn’t really go after them.

Also, modders often get their hands on games not released stateside, and post reviews of them far before they do. Games like Ikaruga for Dreamcast arguably made it to the US on GameCube because of the mod penetration in the States, which kept conversation about the title alive well after Sega’s little beauty bit the dust. Speaking of the DC, that’s one console where modding probably did hurt the machine more than help it. Sega, also a viable publisher, was hurt financially by pirated titles. But I would argue the industry dynamics of 1999 up through the PS2 launch is markedly different than the Wii scenario; from target audience to system gameplay, the Wii presents a starker contrast from its competition than the DC did from PS2.

It should be noted Nintendo has a long-standing history of scouring the underground to hunt down hackers and piraters. This is a company that actually went after people modding its long dead NES Roms, and even sent out nasty emails to people who posted pictures of its classic franchises. Given Nintendo sells those games now for what I think are still ludricously high prices, it’ll be interesting to see how the “new” Iwata-driven Nintendo goes about this modding development. Iwata, a tech-geek himself, might see this the same way as Kutaragi does, and if so, we might see the Big N go quiet on this issue — and how 180 would that be? In less than a year, Nintendo goes from 3rd place to sucker-punching the entire gaming industry, and then shifts from an over-protective, closed circle to a pentration-crazy, who-cares-about-modding stance. If this happens, “Crazy Ken” might not be so crazy anymore.