Apparently Geohot couldn't even access the GPU though his hack that exploited Other OS, meaning it was useless for pirating games.
This is one of the reasons why I think gaming hardware will be replaced sooner rather than later. I'm going to make a bold prediction and say the next generation of consoles may be the last.
Any hardware and software encryption they use can be broken and will be broken. With cloud based gaming, it takes both out of the user's hands. It's really dependent on broadband growth and whether or not OnLive succeeds. Sony has already taken out a patent for their own cloud gaming service. I wouldn't be surprised if it's the norm by 2020.
Interesting idea, and given OnLive or whatever they call it, "streaming gaming" is certainly now a viable option... but I think another alternative is around the corner which will render piracy a much more difficult proposition, both for games and media - a trend back to solid state from optical media. Flash continues to drop in price, and it follows that masked ROM is even cheaper. Some sort of hybrid with active encryption (challenge/response system, revokable keys, etc...), in a custom package the industry uses STRICTLY for media, will likely become a standard. Expect an SD-card sized package, with a pinout the requires an encrypted connection (think about HDCP protection for 1080p signals, for example).
Eliminating optical media means fewer moving parts, less heat, longer life. An SDHC slot for "user media" (home movies, music, etc...), USB for peripherals, and WiFi and Wired ethernet.
For media alone, the box wouldn't cost more than $20 to make - you could give them away with a movie; for next-gen consoles, you also reduce the costs, and you create playback media that can't be duplicated using hacked firmware, burned discs, or hard drives. In fact, devs would get special keys that could allow their program builds to be loaded - a commodity that could be tightly controlled by Sony/Microsoft/Nintendo. I could even see Microsoft developing a reader tied to the OS using signed components or even something tied into new motherboards, to provide apps and games through the same sort of media.
ROM Carts didn't stop piracy for older systems, but until the Gameboy/DS, it was pretty rare because the systems were so expensive. Even so, older consoles simply had no real protection mechanisms (cost was the prohibitive factor for would-be pirates, with copy systems costing two or three times the console itself). The DS carts have some encryption, and Nintendo has made efforts to stymie efforts like the R4, both in their copy protection system and using legal maneuvers... but when combined with current console protection methods and tighter, more active encryption systems, carts can become pretty much impossible (for current means) to crack. The precedent Nintendo has set in cracking down on factories making R4 chips will also make it tougher, in the future, for mod chippers to operate, even if they could crack an active encryption system.
That's my idea. Streaming is certainly an important technology for movies (re: Netflix) and gaming, but users will always prefer, in the majority, media that they can hold in their hands and play any time, any where.
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