It depends on the code that the chip uses. If it is using nintendo coding that they own then the company is illegally producing the chips, by breach of copyright. As was the case with these modcips.
Nintendo raids Wii mod chip factory - 23 Oct 2007 - Computing
If Nintendo can prove a that the company producing the chip has a malicious intent then they also will have grounds for taking confiscating the chips.
Quote:
cant you just update the mod chip eventually
or they will probably come out with a new chip
like the d2cpro for the d2c board
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From what I understand it would be possible but each time Nintendo closes a security hole then a new one to exploit has to be found, this costs Nintendo time and money to find these holes to close and developers time and money to find holes to exploit. If it gets too expensive then people will just give up.
With the D2C there was still money to be made but there has to be a limit eventually. In the old PS days it was worth while because the people developing chips were also the people ripping and distributing backups (for cash) these days that cash stream no ,longer exists so the development of the chip has to be covered by the sales of the chip. There may be no need for further developments anyway - IOS37 has yet to be activated and people are already working on ways round it, downgrading etc. (Although if you stick to your region it shouldn't be a problem).
However this may all change now with the first release of a hacked VC game, although not actually publicly installable (is that even a word?). With this release Nintendo may clamp down even tighter and take out the remaining software and hardware security gaps.
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