Print 27 comment(s) - last by Aloonatic.. on Apr 13 at 6:20 PM

George "GeoHot" Hotz has settled with Sony to undisclosed terms after a contentious court battle. He promises his supporters that they'll appreciate the outcome, though he cannot disclose terms.  (Source: GeoHot)

GeoHot distributed root keys, which opened the PS3 Slim and original to running Linux and homebrews. The keys also allowed pirated software to be run, though GeoHot said that had not been his motivation.  (Source: SCEA)
No official word from hacker on what the settlement entailed

On Monday, Sony Computer Entertainment America LLC announced [press release] via its U.S. Playstation blog that it had entered into a settlement with famed 21-year-old iPhone hacker George "GeoHot" Hotz.

I. The Settlement

According to Riley Russell, General Counsel for SCEA:

Sony is glad to put this litigation behind us. Our motivation for bringing this litigation was to protect our intellectual property and our consumers. We believe this settlement and the permanent injunction achieve this goal.

We want our consumers to be able to enjoy our devices and products in a safe and fun environment and we want to protect the hard work of the talented engineers, artists, musicians and game designers who make PlayStation games and support the PlayStation Network. We appreciate Mr. Hotz’s willingness to address the legal issues involved in this case and work with us to quickly bring this matter to an early resolution.
The release also carried a comment from GeoHot, who writes:
It was never my intention to cause any users trouble or to make piracy easier. I'm happy to have the litigation behind me.
Sony clarifies that Mr. Hotz was not behind the recent attacks on Sony webpages that were conducted by the loosely organized hacker collective Anonymous.  Mr. Hotz had previously backed a boycott on Sony products backed by Anonymous and other digital freedom proponents.

II. Why Did He Settle?  Some Possibilities...

In response to his comments on his blog, Mr. Hotz writes, "The terms of the settlement agreement are 'confidential' and the matter requires that they be 'confidential'."

But he adds, "I think people will be happy...It definitely was not a waste, I assure you."

He reminds commenters multiple times that he is bound by a permanent legal injuction.

It seems likely, based on these remarks, that Mr. Hotz must have obtained something out of this settlement.  It is possible that Sony has agreed in principle to open up the PS3 to homebrews, Mr. Hotz's ostensible chief objective in the case. 

Sony disallowed Linux on the PS3 and homebrews with the release of the PlayStation 3 Slim edition in August 2009.  It also locked out older consoles from carrying out Linux installs via a system update.

The case drew much controversy, particularly due to Sony's seeming invasion of Mr. Hotz's privacy.  During the case an overly permissive judge granted SCEA lawyers subpoenas of Mr. Hotz's Paypal [PDF]; Twitter; YouTube and Google acccounts [PDF]; and the IP addresses of visitors to his personal webpage [PDF].
Thanks to donations, Mr. Hotz had hired several lawyers and mounted a formidable legal defense to challenge Sony's corporate litigation team.

Mr. Hotz also offered his services for hire to Sony, Nintendo Co., Ltd (NTDOY), and Microsoft Corp. (MSFT) to help safeguard their next generation consoles from being jailbroken.  Thus it is possible that Mr. Hotz also received some sort of financial compensation for cooperating with Sony.

It is not uncommon for lawsuit settlements to prohibit the parties involved from discussing.  It may be some time before the suit's effects become clear.

For now, the PS3 jailbreak (root keys) is very much in the wild, despite GeoHot ceasing his direct distribution of it.  The process requires a smartphone and a bit of time.

Mr. Hotz recently clarified that he was visiting South America on vacation for spring break.

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RE: Cell BE...
By Azethoth on 4/11/2011 10:59:18 PM , Rating: 2
"we are paying for a hardware, not renting it..."

Not true at all. The business model is for software sales to subsidize the hardware. As the article notes, the hardware did not break even till 2010.

The implications are this: if you buy a PC from say HP and then only use free or pirated software on it, HP will not care because they made money on the hardware and so they have paid for their R&D & sales overhead. For consoles, if a console releases and sells anywhere between zero and its entire R&D + marketing cost in software, then it is a colossal failure.

So people can pretend all they want that they should be able to repurpose subsidized hardware to avoid buying software for it. But hard economics say you are wrong.

Similarly you could go to a cell phone store and demand that they give you a free phone without a contract. Guess what? They will laugh in your face because it makes no economic sense. The contract subsidizes the phone.

RE: Cell BE...
By Lerianis on 4/11/2011 11:55:41 PM , Rating: 2
On the phone point? BULLPLOP! The fact is that most of the phones when you get the REAL NUMBERS of how much they cost to make? You are still overpaying for them even with that 'discount' they give you for getting a contract.

RE: Cell BE...
By Schrag4 on 4/12/2011 9:12:16 AM , Rating: 2
So people can pretend all they want that they should be able to repurpose subsidized hardware to avoid buying software for it. But hard economics say you are wrong.

Actually I don't see how what people do with their consoles is in any way tied to whether Sony makes money on the consoles themselves.

Similarly you could go to a cell phone store and demand that they give you a free phone without a contract. Guess what? They will laugh in your face because it makes no economic sense. The contract subsidizes the phone.

If this is true, Sony should let you buy the subsidized console with a contract for $60 per month for 1 or 2 years that you can spend with them to get games or accessories. Those that don't sign a contract would have to pay more.

Now I don't think for a second that Sony would do that. However, IMO they were really gambling when they were selling the consoles at a loss. If people figured out how to use the consoles for something else, I don't think they should be punished just because Sony decided to gamble on the price. Just my 0.02

*Disclaimer: I don't own a PS3. My only console is a SNES that my 5 and 7 year olds play. I'm a PC gamer.

RE: Cell BE...
By Aloonatic on 4/13/2011 6:20:04 PM , Rating: 2
I wonder how this "rental" idea can be used in the consumer's favour. When you rent a car, the renter and rentee (possibly making up words here, but you know what I mean :o) ) have different rights and responsibilities than when you buy one. Is that just car market specific, or rental market specific?

I'd also like to see this idea that we have been renting consoles all along (when their are bound to have been marketing materials that have used the word buy, not rent, used to "sell" them) tested in court. Even if the word "buy" never has been used by SONY, that the impression that almost everyone has is that they are buying, not renting, their console and SONY have done nothing to really make it clear, which must count for something too?!

"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007

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