Today I will be using generalizations, making wild assumptions, and backing these with other baseless facts and opinions from sources that I may have imagined. If you've got your tin-foil hat close by, please feel free to follow along.
It's fair to assume that you or someone you know has recently been affected by the latest ban wave by Microsoft. I had heard earlier in the week that the number had reached 600,000 in the United States alone. Destructoid has been kind enough to inform us that we're looking at a solid one million count. For those not familiar with the ordeal I'll provide a little back story.
The firmware mod community likes to refer to a cat and mouse game between themselves and Microsoft. They develop a firmware fix to burn Xbox games, Microsoft changes their DVD drive or updates software, and the community answers by using the latest fix once again. In addition to updating software and hardware, Microsoft responds with bans, usually occuring in large waves. These bans only affect your console. They do not disable your Xbox Live account, or affect your hard drive directly. As of recently they disable your ability to write games to the HDD, retain achievements on profile migration, and the use of Windows Media Center. So the solution to a console ban has always been to get your hands on a new Xbox 360.
As we transition into a new age of console gaming there is a large market of PC gamers who are acclimated to simply not paying for content. When presented with a choice between the newest generation of consoles it's absolutely appealing to purchase an Xbox 360. The firmware flash uses a connection that most computers have and instructions are readily accessible if you wish to look for them, or have a friend familiar with the process. As an indication of how accessible the mod is, simply take a look at the number of bans.
Now, let's sit on the other side of the table and wear Microsoft's expensive shoes;
We know this market exists in which there are simply those who will not pay for our titles. There must be a way to make money here, right? Absolutely. The product is left with such large vulnerabilities that could potentially be addressed. But what would really be the point when we generate a questionable margin of sales from these individuals based on the ability to mod?
Microsoft has already made their money when that console was first purchased. The sale of titles is an incentive mostly for the developers. And the bottom line is that people who don't want to pay for games, won't pay for games if there's a way around it. When faced with piracy all Microsoft needs to do is ban your hardware. They assume that as a consumer your only other contribution is Xbox Live. So if they want to make more money, they push you into a position where you're going to want to invest in their product again and drive their sales.
Now if you're asking yourself, "why would any of those pirates be so foolish as to crawl back to Microsoft?" I would answer you with another question; "How much do video games cost these days?" Anyone caught in this position is going to consider how much money they are not spending on games. If they purchase a new console, five releases later they have recouped their investment and are right back to playing with friends. It can be a little difficult to escape from that logic trap.
Now we move on to the dirty bits;
Bans are withheld until they can drive sales.
Most large ban waves have occurred around when holiday and fourth quarter sales are upon us. Your best titles are being released, prices are being marked down, and everyone is ready to spend. This is an excellent way to ensure you're inflating your numbers at just the right time. Because...
Console sales will get you exclusives.
Developers understand that their games are being pirated. But that underlying concern is put to rest at the potential of reaching a larger market. When you can inflate your numbers through new console sales due to failed hardware or bans it makes you seem impressive. Especially when numbers are being thrown around claiming the console sits in the homes of 60% of families.
Not everyone is banned.
In the past, bans have consisted of a portion of the actual modder community. You could always find proof that some genius who had been playing with non-stealth firmware a few weeks prior with an unreleased game was still enjoying his Xbox Live. Many would go through the rigors of testing their ripped games, updating the firmware, and staying offline only to be greeted by the hammer. This, coupled with the fact that bans would come in waves over a few weeks, always left a bit of confusion to the process while giving a false sense of security. What this tells the community is that it is still possible to cheat the system. If you get that new Xbox 360 you'll probably be fine until next year. The ban wave will end soon anyway.
MS detects the firmware.
This time around everyone was assured that they would be fine so long as they played it safe. The firmware could not be detected, right? Wrong. A gentleman running a business in Mexico quickly proved that a console with the newest firmware mod, without playing any burned games, could be banned as well. Information collected showed no pattern at all aside from the fact that these bans affect all 360's with modified firmware. While some remained safe, it was clear this was going to be the largest ban to date. Given Microsoft's habit of intentionally withholding bans to create false hope, there's nothing to say they couldn't always detect the firmware mod. Following the discovery, panic and bestiality ensued. Was this the end for everyone that wished to play a modded console online?
No, the community perpetuates the cycle.
As if on queue, the developer of the modded firmware steps forward. It appears everyone was right, most all consoles will be banned this time. But don't worry, there is hope. A new firmware is being developed that will not only evade Microsoft's detection, but is indistinguishable in all aspects from standard firmware. With a catch, of course. This firmware is only being developed for the new DVD drive Microsoft began putting out recently. As of August '09 the drive had been considered unmoddable. This of course means that if you want to replace that Xbox 360 there's little hope of finding a used one to work. You will be looking forward to making a new purchase and driving up sales for this quarter and holiday season.
Be on the look out for a huge spike in Microsoft sales over this week and the following. While it will certainly be attributed to the holiday season, know that a good portion of those one-million banned are giving their money right back to Microsoft.
Thank you for the piracy!