U.S. Immigration and Customs Enforcement agents raided more than 30 businesses and homes in 16 states, in search for hardware that allows for pirated games to run on modded consoles from Microsoft, Nintendo and Sony.
32 search warrants were served at businesses, storefronts, and residences in 16 states: California, Florida, Hawaii, Idaho, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, and Wisconsin.
The locations were targeted because federal agents believed they were associated with subjects who are allegedly involved in the direct importation, installation, sale, and distribution of the devices that are of foreign manufacture and smuggled into the United States.
The pieces of hardware that allows users to play counterfeited games replace the original chips in gaming consoles like PlayStation 2, Xbox, Xbox 360 and Nintendo Wii. The so-called “modded chips” circumvent the copy-protection mechanisms included by default in the consoles, allowing for pirated materials to be played.
With firmware and hardware modifications, consoles can be “tricked” to play all country region games or can be turned into multimedia machines capable of playing MP3 music, films on VCD, SVCD or Div-X format, multi-region DVD players.
Modification chips and swap discs for gaming consoles violate laws under the Digital Millennium Copyright Act of 1998 (DMCA). According to the Entertainment Software Association (ESA), the makers of the gaming consoles, game developers, and others in the industry have incurred billions of dollars in losses worldwide due to sales lost to those selling counterfeit and pirated video games.
Due to piracy, the US economy suffers losses estimated at around $200-$250 billion annually, and more than 750,000 jobs are lost, according to the US Chamber of Commerce.
"Illicit devices like the ones targeted today are created with one purpose in mind, subverting copyright protections," said Julie L. Myers, Assistant Secretary of Homeland Security for Immigration and Customs Enforcement. "These crimes cost legitimate businesses billions of dollars annually and facilitate multiple other layers of criminality, such as smuggling, software piracy and money laundering."
The recent enforcement action is the result of a year long investigation conducted by the ICE Office of the Assistant Special Agent in Charge, Cleveland, Ohio.
"Microsoft applauds ICE for its effort to reduce piracy and protect the intellectual property of Microsoft and its industry partners," the company said in a statement. "This is an important step in the continuing fight against piracy and the threat it presents to the global economy and consumers throughout the world."
In May, the Redmond giant started culling modded Xbox 360 from Xbox Live, affected consoles bearing the following status codes: W: 0000-000B, X: 0000-F009, Y: 00A8-6820 and Z: 8015-190D.