Why the PS3 hack is another nail in the game industry coffin

Sony's PS3 has finally fallen to the trials and persistence of the hacker community. With the announcement of a USB plug'n'play mod to be commercially available in the last few days, Sony has lost no time in attempting to halt retailers in both Australia and the US from selling these mod chips. However, as expected with any piece of software, it didn't take long before it was spreading across the internet in the form of PSGroove allowing the hack to be freely downloaded. But what implications does this chip have? Who will it effect? What is it capable of?All valid questions and in a perfect world, the official stance of the mod being for homebrew only would be correct. But unfortunately the vast majority of people interested in this want it for one reason and one reason only: Piracy.