In a presentation at the 27th Chaos Communication Congress fail0verflow demonstrated how all the consoles can be hacked, and specifically how the most secure console of this generation, the PS3, could have it's security measures bypassed.
fail0verflow claims it has done this so that users could install Linux on their PS3, a feature available to all PS3s prior to the release of the PS3 Slim and the new firmware that came with it. They also have not released an easy-install firmware update, or anything of the like, claiming it was proof of concept.
Indeed this is exactly the type of work that security researchers have always done. I have written academic papers claiming that the difference between hacker research and academic research is small, to say the least. In fact being that they hold conferences, publish their findings, and frequently invite companies to see their work, white hack hackers seem more like cowboy computer science researchers than the nefarious criminals they are often portrayed as.
Though, it seems the plot has thickened as iPhone hacker George Hotz (aka Geohot) got involved and has posted it for use on his website. It appears that this would, in fact, allow you to run Linux, run copied games (duping), run hombrew software and games, play copied Blu-ray discs or movie files, essentially it could open up a PS3 like a PC, perhaps even more so if it can be used to defeat Blu-ray security.
Now this falls into interesting legal grounds, as over the summer the Librarian of Congress revisited and offered changes to the rules that govern breaking the security of video games for research purposes.
Regardless, between the PS3 research conducted by fail0verflow and the accessibility of the release made by Geohot it seems that hacking the PS3 is now a reality. With the genie out of the bottle, how will Sony respond to hacked PlayStation 3s? Will they come down like Microsoft did with modded Xbox 360's and ban them from Xbox Live? Or can this even be tracked?
Folks have been trying to find ways to back-up, duplicate, or pirate PS3 discs for years. It seems that the PS3 has officially been hacked.