Games publisher EA believes things will turn around for the company next year. This year has been pretty unpleasant for the company after its trusted DRM sunk its flagship SimCity release.
But Electronic Arts seems to think that is all behind it and has forecast fiscal 2014 earnings above Wall Street’s expectations. EA has been cutting staff and reorganizing studios in recent months to embrace new game platforms. It is preparing a new batch of games including the latest installment of its “Battlefield” shooter game franchise.
Digital revenue, from mobile games, online offerings and other newer sales channels, rose 45 percent year-over-year to $618 million, larger than EA’s packaged goods business in the fourth quarter ended on March 31. It thinks that consumers have held back from buying hardware and software as they await new versions of Sony’s PlayStation and Microsoft Xbox expected later this year.
The video game maker forecast revenue of $4 billion, in line with Wall Street’s expectations. Weakness in the packaged games market dented revenue, but EA recognized $120 million of deferred payments from its “Battlefield Premium” service in the fourth quarter.
For the latest quarter, total revenue declined to $1.2 billion from $1.37 billion a year ago. Adjusted revenue rose 6.4 percent to $1.04 billion over the same period, barely beating analysts’ average estimate of $1.03 billion.
Net income fell to $323 million from $400 million last year.
Microsoft is developing designs for a touch-enabled smart watch, joining a number of other large competitors like Samsung Electronics and Apple who are said to be working on similar devices, according to a recent report.
Executives at suppliers to Microsoft told The Wall Street Journal that the company was sourcing components for the prototype of what could potentially be a “watch-style device.”
Microsoft has, for example, requested 1.5-inch displays from component makers for the prototype, an executive at a component supplier told the newspaper. It is unclear whether the company will decide to go ahead with the watch, the newspaper added.
Microsoft could not be immediately reached for comment.
A large number of vendors are looking at new product categories beyond smartphones and tablets.
This isn’t the first time, however, that Microsoft may be looking at watches as a product. It launched a smart wrist watch around a concept called Smart Personal Object Technology it unveiled in 2002, but withdrew it after a lackluster performance.
The Redmond, Wash., company is seeing its key PC market under threat from smartphones and tablets, and the failure of its new Windows 8 operating system to boost sales significantly. IDC said last week that first quarter PC shipments totaled 76.3 million units, down 13.9% compared to the same quarter last year. (The decline was worse than the 7.7% previously forecast by the analyst firm, and the market could be headed into further contraction, the research firm added.
Verizon Wireless reportedly has offered $1 billion to $1.5 billion to acquire some of Clearwire’s spectrum leases, possibly complicating Sprint Nextel’s attempt to buy out the company in conjunction with its acquisition by Softbank.
Clearwire is struggling financially but owns broad swaths of spectrum, the lifeblood of wireless networks. The April 8 bid from “Party J,” which Clearwire disclosed in a Securities and Exchange Commission filing on Friday, is the latest in a series of offers for its spectrum licenses. Unnamed people familiar with the matter identified “Party J” as Verizon Wireless, according to a report in The Wall Street Journal.
Clearwire is a key part of a complicated set of possible transactions that could make a much stronger competitor out of Sprint, the country’s third-largest mobile operator. Sprint already owns roughly half of Clearwire and is bidding about $2.2 billion to buy the rest of its stock. That deal depends on Softbank’s planned $20.1 billion offer for 70% of Sprint, which is still undergoing regulatory review.
Clearwire holds 150MHz of spectrum or more in most major markets of the U.S. Verizon would buy only a portion of that spectrum. “Party J offered to acquire Clearwire spectrum leases generally located in large markets,” Clearwire said in the Friday filing, a proxy statement to shareholders on the Sprint buyout bid. The proposed gross price of $1 billion to $1.5 billion would be reduced by what Clearwire pays for the leases, which could be substantial, according to Clearwire’s filing. The company said it would discuss the offer with “Party J” and Sprint.
The recent launch of SimCity was a troubled one for Electronic Arts, as the company struggled to get its servers fully functional. Ordinarily, this wouldn’t be good for any game’s launch, but when a title is designed to be always online, and countless players therefore can’t even play the game they just purchased, the situation quickly escalates. EA moved as fast as it could to rectify the situation, but some players felt EA’s real intent was to force DRM on its customers. Maxis head Lucy Bradshaw’s blog post seemed to only stir the pot, but EA Labels president Frank Gibeau now insists that DRM had absolutely nothing to do with the game’s design whatsoever.
Speaking at GDC this week, Gibeau commented, “That’s not the reality; I was involved in all the meetings. DRM was never even brought up once. You don’t build an MMO because you’re thinking of DRM – you’re building a massively multiplayer experience, that’s what you’re building.”
Not only was DRM not a topic of internal discussion at EA, Gibeau said, but the executive also made it very clear that DRM is simply not an option for publishers anymore.
“At no point in time did anybody say ‘you must make this online’. It was the creative people on the team that thought it was best to create a multiplayer collaborative experience”
“DRM is a failed dead-end strategy; it’s not a viable strategy for the gaming business. So what we tried to do creatively is build an online service in the SimCity universe and that’s what we sought to achieve. For the folks who have conspiracy theories about evil suits at EA forcing DRM down the throats of Maxis, that’s not the case at all,” he said with a laugh.
For EA and Maxis, Gibeau said it really was a case of building a completely connected world with an MMO-like infrastructure.
“It started with the team at Maxis that had a creative vision for a multiplayer, connected, collaborative SimCity experience where your city and my city and others’ were [working together]; for better or for worse, and for right or for wrong, the lead designers and the producers and the programmers felt like they wanted to tell us a multiplayer, cooperative city story around SimCity. We had built a bunch of these and you could’ve gone deeper and deeper into your plumbing and managing toilets and electrical posts, but we felt there was a bigger story to tell and a bigger opportunity to chase with an always-on connected experience built around that concept. That’s what we set out to design and that’s what Maxis created and brought forward into the marketplace,” Gibeau explained.
“At no point in time did anybody say ‘you must make this online’. It was the creative people on the team that thought it was best to create a multiplayer collaborative experience and when you’re building entertainment… you don’t always know what the customer is going to want. You have to innovate and try new things and surprise people and in this particular case that’s what we sought to achieve. If you play an MMO, you don’t demand an offline mode, you just don’t. And in fact, SimCity started out and felt like an MMO more than anything else and it plays like an MMO,” he continued.
Gibeau acknowledged that EA probably should have done a better job in its messaging with the community, making sure that they understand the MMO nature of the title and the need to be always connected.
“I’m disappointed that we didn’t do a better job communicating that upfront. I’m disappointed that we had a rough first couple of days in terms of underestimating how people were going to play the game and how the server infrastructure was going to hold up, but we responded the best we could, we got people to fix it as fast as we could,” he said. “We had a majority of people come through who had a good experience and a bunch of people that didn’t and that’s not acceptable, but at the same time we tried to do make-goods with free games, we’ve been fixing and constantly tinkering with the experience and it’s an experience that we want to continue to evolve over time. It has to be an online experience like an MMO where you bring out new events, new kits, new places to go, and that’s more the vision for where SimCity is going.”
Even with its problems, however, the game did quite well, selling over 1.1 million copies in its first two weeks, which Gibeau noted makes it “the fastest-selling and biggest SimCity we’ve ever built.” Gibeau believes that part of the problem is the entire situation snowballed when the media started covering it.
“Some customers have had problems, and you’re in the media; you know how some things can snowball, and unfortunately that’s what happened here. We did the best we could in order to respond to that and made adjustments to the service but the game is continuing to sell through at a much higher expectation than we thought. The servers are now at 100 percent and there’s plenty of capacity… and we’re not the first or the last company [to have a problem like this] – Activision Blizzard, Steam, Ubisoft…everybody’s had this problem and it was our turn I guess,” he said.
Yahoo Inc is in discussions to purchase a controlling interest in Dailymotion, one of the world’s most popular online video websites, in what would be Yahoo CEO Marissa Mayer’s largest deal since taking the reins in July, the Wall Street Journal is reporting.
Yahoo could acquire as much as 75 percent of Dailymotion, which is owned by French telecommunications firm France Telecom-Orange, according to the newspaper report, which cited anonymous sources.
Dailymotion could be valued at roughly $300 million, according to the report, which noted that the deal is not imminent and could fall apart.
“We are unable to confirm, deny or comment on speculation regarding potential talks between Yahoo and Orange at this time,” Dailymotion Managing Director Roland Hamilton said in an emailed statement.
Yahoo and France-Telecom Orange declined to comment.
France Telecom-Orange acquired Dailymotion for $170 million through a two-phase deal, with the most recent transaction closing in January. Dailymotion’s editorial and executive management operate independently of France Telecom-Orange.
Dailymotion is the No. 12 ranked online video Web property in the world, according to industry research firm comScore. It says Dailymotion has 116 million unique monthly visitors and more than 2 billion videos viewed. Google Inc, which owns YouTube, is the world’s No. 1 Web video property while Yahoo’s various websites ranked 10th on the list.
The transaction for Dailymotion would represent Yahoo’s largest deal since Mayer, a former Google executive, took charge last year. Yahoo has acquired several small mobile and web start-up companies since Mayer became chief executive last year.
EA games has been caught out making bogus claims about its SimCity claiming it needs a server to function. The outfit has been responding to requests from users that it abandon its DRM and allow for a version of the game that does not need to log onto a server. EA insists that it needs the servers to work and that it would take the company ages to reprogram the game so that it can work independently.
Maxis’ studio head, Lucy Bradshaw went on record saying that the software offloads a significant amount of the calculations to EA servers, and that it would take “a significant amount of engineering work from our team to rewrite the game” for single player. But that is complete rubbish according to a SimCity developer who has got in touch with RPS to tell us that at least the first of these statements is not true. He claimed that the server is not handling calculations for non-social aspects of running the game, and that engineering a single-player mode would be a doddle.
He told Rocketpapershotgun.com that the servers were not handling any of the computation done to simulate the city you are playing. They are still acting as servers, doing some amount of computation to route messages of various types between both players and cities and doing cloud storage of save games, interfacing with Origin, but doing nothing for the game itself.
Kotaku said that the game was happy for 20 minutes before it realized it wasn’t syncing to the servers and the DRM kicked in. Game play can’t be using the servers at all. For some reason EA is determined to keep its DRM up and running even if it means killing the game completely.
I haven’t played any of the Dead Space games, so I can’t comment on the criticisms that Dead Space 3 sold poorly because of game content or the way in which it dumbed down the gameplay experience to appeal to a broader audience. I can talk about how I see the microtransaction and other changes that vocal fans derided fit in with Electronic Arts’ broader strategy.
The games market is polarizing. The big are getting bigger (see Grand Theft Auto and Call of Duty beating first week sales records year after year) while the niche is becoming more viable (see every indie game on Steam) while the middle is getting squeezed (see THQ, Eurocom and dozens of other midsize developers). The emergence of digital distribution has brought along a bigger change than many people realized, driven by two different properties:
- It is cheaper than ever before to distribute content
- It is possible to have unique, personal, one-to-one relationships with every customer
The strategies that EA are putting in place reflect this reality.
The variable demand curve
The past 30 years were about putting games in boxes, shoving them in shops and trying to sell as many as possible. The price was basically fixed at around £30-40, so the only way you could make more money was to do more volume, i.e. sell more copies. You could also try to maintain the price for as long as possible by restricting price reductions and limiting trade-ins. What you couldn’t do was to connect with your fans in any meaningful way.
We no longer live in that world, except perhaps for the very biggest blockbusters. We live in the world where there is a bewildering choice and variety of games available to us. At the same time, development costs for AAA games are enormous and rising, while the market is not getting bigger. In fact, that subset of the market is shrinking as players are distracted by the many different ways, times and devices they can play games on.
There is only one solution. It is to find a way to use the initial launch of AAA game as a starting point in your relationship with fans. It is to start the long process of turning games from one-off purchases to long-term relationships. It is about using games to engage with and retain players, to convert some of those players into fans and to convert some of those fans into superfans. In the process, niche AAA games that are not viable using the blockbuster, fixed-price-massive-volume model can become successful long-term businesses.
Viewed through that lens, everything that EA is doing makes sense. It is trying to use its games as the starting point of the relationship. Sometimes those games are free (as in most of its mobile, tablet and online strategy). Sometimes they are paid (as in its console strategy). What they are trying to achieve is a revenue model which means that those people who love their games, who keep playing, who are vocal and demanding, are given an opportunity to spend lots of money on the products that they love. It is the only way for niche AAA games to survive.
I don’t know why Dead Space 3 didn’t do well. I don’t know if it was about poor design decisions, a change of focus or gamers voting with their wallets and not supporting a game with microtransactions on principle (EA will have data on how many users engaged with microtransactions. Answering the other questions will be harder).
But I don’t think gamers should view any rumored cancellations of blockbuster projects as a victory against microtransactions. Finding a way for the biggest fans to pay lots of money to get things they truly value is the only way to support niche AAA games (and by niche, I mean anything outside the top 4 or 5 games released every year). EA may not have got the exact model right yet, but they are experimenting. The failure of the experiment does not mean that EA will abandon microtransactions: it means that it will abandon anything other than blockbuster games and tablet games.
Is that what you really want?
Nicholas Lovell is director at GAMESbrief, a blog about the business of games. He provides business advice on free-to-play and paymium design. He will be giving a masterclass on how to make money from free-to-play games in San Francisco on Sunday March 24, just before GDC. You can also book one-to-one surgeries.
Opera Software had just announced that its web browser reached 300 million active users only to say that it will make a big change in its key web browser software product. The firm announced that it will dump its Presto rendering engine and move to Webkit.
Apple and Google use Webkit for Safari and Chrome, respectively, while Microsoft uses Trident in Internet Explorer and Mozilla has stuck with Gecko. According to Opera Software the switch is due to web developers optimising their websites for Webkit to render correctly rather than its own Presto engine.
The firm said the move will free up engineers who have been working on making the Presto rendering engine display websites correctly to work on new products and features. Opera Software will contribute to the Webkit project and said that by contributing to a more popular rendering engine it can have more input to how websites are built.
Opera Software gained a lot of users through its mobile web browsers that were shipped by default on mobile phones. However the firm has found that its web browser has been left out in the cold with Apple bundling Safari on its iDevices and Google shipping its own Webkit browser with Android and developing Chrome.
Opera’s move to Webkit might upset traditional users however a firm that is battling with Apple and Google stands a better chance of winning users by working on high level features rather than low-level software.
With buyout rumors getting louder and louder, analysts say Dell Inc. could be looking to free itself from quarterly distractions and shareholder pressures – a move they said could be good for the world’s No. 3 PC maker.
“I can see where it would look like an attractive option,” said Dan Olds, an analyst with The Gabriel Consulting Group. “A private company doesn’t have to answer to Wall Street every quarter, and can make bigger moves, faster, than a company that has to run every decision through a board of directors or major shareholders.”
Dell is reportedly in the midst of preliminary talks about a leveraged buyout with private equity firms, according to The Wall Street Journal.
A leveraged buyout would take Dell, which has been public for about 25 years, back to being a private company. CEO and founder Michael Dell, who reportedly already owns 15.7%% of Dell shares, would need to put together the financials to buy back the company’s stock.
Dell declined to comment on the spate of recent reports.
The company has been suffering through the struggling PC market, which has been continually hammered for the past year or more by the sluggish economy and the burgeoning tablet market.
In the fall of 2011, Dell slipped from what had once been a solid number two spot in the PC market, and was surpassed by Lenovo. Dell now still sits in third place, with 10.2% of worldwide market share. It’s barely ahead of number four Acer Group, which has 9.5% of market share.
Google Inc is secretly developing a handset code-named “X-phone” with recently acquired Motorola, aimed at garnering market share away from Apple Inc and Samsung Electronics Co Ltd, the Wall Street Journal said, citing sources familiar with the matter.
Google acquired Motorola in May for $12.5 billion to bolster its patent portfolio as its Android mobile operating system competes with rivals such as Apple and Samsung.
The Journal quoted the people saying that Motorola is working on two fronts: devices that will be sold by carrier partner Verizon Wireless, and on the X phone.
Motorola plans to enhance the X Phone with its recent acquisition of Viewdle, an imaging and gesture-recognition software developer. The new handset is due out sometime next year, the business daily said, citing a person familiar with the plans.
Motorola is also expected to work on an “X” tablet after the phone. Google Chief Executive Larry Page is said to have promised a significant marketing budget for the unit, the newspaper said quoting the persons.
Google was not able to be reached to provide comment on the story.
Electronic Arts is consolidating some of its online gaming efforts. The publisher is taking its free-to-play gaming hub, Play4Free, and folding it into its online storefront, Origin.
EA already has a free gaming section set up on Origin, with links to all of the Play4Free titles. The same section also plays host to additional EA efforts like Crossfire and more casual games from the publisher’s Pogo casual gaming brand, including Word Whomp and Monopoly: The World Edition.
The Play4Free brand has been home to seven of EA’s free-to-play online games, including Battlefield Heroes, Battlefield Play4Free, and Need for Speed World. Even with the additions, the Origin label doesn’t extend across all of EA’s PC microtransaction titles; Tiger Woods PGA Tour Online continues to operate apart from the Play4Free brand, and the game’s official site gives no indication that it will be moving to Origin. Additionally, EA runs a number of games on Facebook, including The Sims Social and Outernauts.
Play4Free was announced in 2008, and officially went live with the 2009 launch of Battlefield Heroes. Origin is a comparatively younger endeavor, having been unveiled and rolled out in June of 2011.
They already sells phones and tablets, provides a wealth of online services and has been laying high-speed fiber to people’s homes. Now Google is apparently weighing the possibility of a wireless network service as well.
Google has been in talks with satellite TV provider Dish Network over a possible partnership to build out a wireless service that would rival those from carriers such as AT&T and Sprint, the Wall Street Journal reported late last week.
The talks are at an early stage and could amount to nothing, and Google is just one of many companies Dish is talking to, according to the Journal, which cited anonymous sources. But it raises the prospect that Google might expand its business in a new direction.
Dish has been buying spectrum that could support a wireless service, although it still needs regulatory approval to set one up. In an interview with the Journal Thursday, CEO Charlie Ergen said the partners Dish is talking to include companies that don’t currently have a wireless business.
Google declined to comment on the report, the newspaper said.
The move would take Google in another new direction and could support its goal to make high-speed Internet service more widely available in North America.
News of yet another PlayStation 3 hack is unlikely to be greeted with too much surprise, but the damage wrought by the release of the LV0 bootloader keys last week could have serious repercussions – not just in terms of PS3 piracy but also for the long-term security of the PlayStation Network.
Up until now, Sony has coped relatively well with the multiple breaches of its security that have occurred over the last couple of years. The original PSJailbreak was built around an exploit in the USB interface present up until firmware 3.41, and that hole was plugged by Sony within weeks. Hackers managed to run a small amount of games built for later system software revisions but through mandatory software upgrades, access to the PlayStation Network was off-limits for those who remained on the hacked firmware.
Then, disaster. Inherent weaknesses in Sony’s encryption algorithms were unveiled by hacker group fail0verflow, swiftly followed by the publication of the metldr “master key” from the infamous Geohot. PlayStation 3 was blown wide open – seemingly irrevocably – from two fronts. Not only could all aspects of the system be decrypted with the master key and then reverse-engineered, but thanks to fail0verflow’s signing tools, the code could be repackaged into a form that the PS3 was happy to process. The era of the “custom firmware” was upon us and there was a point where every console on the market could be compromised simply through running a CFW update from a memory stick.
System software 3.60 saw Sony fight back valiantly. New encryption protocols were put in place which effectively mothballed metldr, while the specific signing algorithms used for fail0verflow’s tools were blacklisted. Encryption keys were changed so new software would not run on older firmware, and Sony even released a revised console with changes to the Cell architecture that addressed some of the exploits hackers were using to gain access to the PS3 hardware – even the metldr key was changed on this new hardware. Access to the PlayStation Network was completely locked out on hacked consoles.
There’s little evidence that the hack which saw PSN’s servers compromised in one of the biggest security fails in internet history had much to do with the breaches that preceded it. The hack was server-side and there Sony was running traditional hardware with open source software, which had vulnerabilities of its own. It’s telling that even after PSN was restored to service, the underlying protocols by which PS3 “spoke” to the servers hadn’t changed so much at all.
However, the hackers were not done with PS3. A new “jailbreak” based on another USB dongle appeared last year, dubbed “TrueBlue”. This allowed newer games to run on older, compromised firmware 3.55 PlayStation 3s. It worked through the hackers decrypting newer games and then re-signing them with a variant of fail0verflow’s tools. This time there was no exploit in Sony’s USB code: instead the hackers released their own firmware which would not function without the dongle attached. In short, it was a crude way to monetise the fact that someone, somewhere had somehow managed to retrieve decryption codes from Sony’s latest OS updates. At the same time, the unique “pass phrase” buried within the firmware that allows PS3s to connect with the PlayStation Network was also leaked – and then leaked again after Sony changed it.
If there’s any silver lining to the new PlayStation 3 hack, it’s down to the fact that only decryption has been hacked, not encryption. This means that only older consoles running 3.55 firmware or lower can be used with the latest piracy-enabling firmwares. Consoles running 3.56 or later can’t run any kind of unofficial code.
So how was it done? Despite locking down metldr, there remained one further vulnerability – one that Sony simply cannot revoke: the bootloader key. If you still have an untouched PS3 from the 2006 launch, you can power it up and update it to the latest 4.30 firmware. Every PS3 requires the means by which to decrypt any firmware update – past, present or future. That’s what the so-called “lv0″ bootloader key does, and that’s the final element of PlayStation 3 security that is now out there in the public domain.
How did it get out there? All the indications are that the hackers who made the discovery – who have dubbed themselves “the three muskateers” had no intention of ever making it out into the public domain. However, one of their associates with access to their work appears to have sold it on, and the release of the bootloader keys was made in response to Far Eastern hackers looking to profit from a new wave of “custom firmware”. Rather than allow others to profit from their work, the “muskateers” went nuclear, and released the master key so any one with PS3 hacking experience could roll their own firmware. Since then, in just the space of a few days, at least two piracy enabling system updates have been released.
There’s a little good news and somewhat more bad news for Sony here. The good news is that while decryption has now been fully blown open, there is no firmware 4.30 equivalent to fail0verflow’s encryption tools – only Sony has the means to produce code that runs on any console running on firmware 3.56 or higher. The hackers meanwhile, have to rely upon the 3.55 fail0verflow tools, which can only run on un-updated consoles. Many firmware revisions have been released since then and we’d tentatively suggest that the vast majority of active consoles out there will be running on the newer firmware. At the time of writing, any new hacked code cannot be run on these machines.
So while the overall damage is most likely limited for now in terms of revenue lost due to piracy, there are still many fundamental issues Sony has to address. Firstly there’s the integrity of the PlayStation Network. Genuine, legitimate players will be playing online not only with people who’ve pirated PS3 software, but have the means to adjust any game data they want. Pirate games run from read/write PC hard drives rather than read-only optical media making customisation much simpler – maps could be altered for example to give hackers an unfair advantage in a first-person shooter. Sony can address this by changing the “pass phrase” which allows PS3s to connect to PSN, but this brings us nicely to the second major problem: how to tackle the leak of the lv0 bootloader keys.
The problem here is that any change Sony makes to the PS3 software has to be read by the PS3 – and that’s what the bootloader does. The PSN pass phrase can be changed, but that change needs to be integrated into data that lv0 decrypts – and thus it can be read by hackers. Similarly, new games coming out can be re-encrypted with keys not present in current firmwares – but they need to be delivered to the console via an update that (you guessed it), lv0 – and thus, the hackers – will be able to read. Now Sony can make it harder for those keys to be revealed, they can encrypt to many hundreds of layers if they need to – but at the end of the day, the beginning of the process always begins with the bootloader, which has been irrevocably compromised.
In terms of guaranteeing the validity of the console attached to the network, Microsoft has been far more aggressive than Sony thus far, and has faced attacks from a number of different sources. Consoles running custom firmware are quickly identified and banned from Xbox Live, while users flashing the DVD drive in order to run burned games have also found themselves barred from the service. But it seems that the hackers are always one step ahead, and in the here and now, pirates are still able to access Xbox Live relatively easily using copied games. Only those foolish enough to run leaked code days or even weeks before the game is released are identified as hackers and face the uncompromising wrath of the banhammer.
So where does this all leave game developers? At the most basic level, when it comes to multiplayer gameplay, the bottom line is that the system-level methods of weeding out cheats probably aren’t enough on their own: it’s going to be down to developers to add further levels of security to ensure that integrity of online gameplay. In short, exactly the sort of thing that’s been a required standard for PC gaming for a long, long time now.
Sony is facing new PlayStation 3 security headaches today, as Eurogamer reports that hackers have released custom firmware that allows for compromised consoles to go on the PlayStation Network, and LV0 decryption keys that will facilitate circumvention of future security updates.
PlayStation 3 security was largely undermined in early 2011 after hacking team Fail0verflow detailed a technique to get unauthorized code running on Sony’s console. At the time, the group said they attacked the console’s security as a response to Sony removing the OtherOS feature that allowed installation of the Linux operating system on the PS3. Eurogamer notes that Sony’s 3.60 firmware actually managed to plug many of the security holes from that event, but piracy has persisted for those willing to run older firmware and not take their systems onto PSN.
However, the newly released custom firmware contains the current PSN passphrase security protocol. And even if Sony changes that with new firmware, the release of the LV0 decryption keys means that hackers should be able to easily lay bare future security measures in system updates.
According to Eurogamer, Chinese hacking group BlueDiskCFW had planned to sell the custom firmware circumvention’s, which prompted another group called The Three Tuskateers to release the LV0 keys. They also released a statement claiming to have discovered the keys some time ago, adding, “only the fear of our work being used by others to make money out of it has forced us to release this now.”
Sprint, which considered a merger with MetroPCS earlier this year, may debate whether to outbid T-Mobile USA for the carrier, according to The Wall Street Journal. MetroPCS announced last week that T-Mobile parent company Deutsche Telekom has made a merger offer.
Sprint’s board rejected a merger with MetroPCS in February.
A Sprint spokesman declined to comment on news reports that Sprint was considering a bid for MetroPCS.
Sprint’s board seems unwilling to enter into mergers, said Jeff Kagan, a telecom analyst. The board has rejected past overtures by T-Mobile, he said.
“Where is the loose screw at Sprint Nextel anyway?” he said in an email. “CEO Dan Hesse seems to want to do deals. However, the Sprint board of directors doesn’t. This behavior is not helping Sprint.”
Sprint has posted net losses in 19 straight financial quarters. The third largest mobile carrier in the U.S. is in the middle of an effort to save money by consolidating multiple network technologies into one network and to roll out LTE service.