User Appropriation

When a company releases a software application or a software-based product it often actually enters a new phase of development. Skilled users will modify, change and develop the technology further, to suit it to their needs or they might even adapt it for completely different uses, uses which are often unintended and unimagined by the original developer. For most software-based electronic consumer goods one will find easily modifications and related developer communities online.

Video game consoles and their handheld equivalents are extremely popular consumer devices and constitute a valuable and highly contested market. The business models of video game consoles revolves around generating revenues from licenses for third-party developers, selling add-ons for the console such as controllers, remote control and other devices. Increasingly, access to network services and virtual goods become important in generating revenues. The hardware costs provide little or no margin for revenues and often even require vendors to subsidize the initial purchase for the customer. Therefore any appropriation that bypasses the possibilities of generating revenues from licensed software and other add-ons is critical for the vendors. However, users quickly appropriate the design through hacking and reengineering in order to modify the consoles and to execute other than vendor-approved software, and also to play copied games. From playful do-it-yourself modification and homebrew software development to professionalized production of modified processors, so-called modchips, game consoles constitute the emergence of an entire ecology of developer communities, web platforms, production and distribution channels for modified and further developed devices. It led to the emergence of a grey market for modification so-called modchips that enable users to circumvent the original design limitations. This article describes the dynamic interactions between companies, gaming enthusiasts, hackers, and modchip producers in a grey market.

When Microsoft entered the heavily contested market for video game console with its Xbox in 2001, it quickly found the console to be hacked and modified (Huang 2002, 2003; Takahashi 2006, 56-59; Schäfer 2011, 82). The technical specification matched a small computer, which does not come as a surprise given Microsoft's background as the market leader for PC operating systems. A quickly emerging scene of various communities with the most different motives for hacking the Xbox went to work. A group of dedicated Linux enthusiasts, called Xbox Linux Project tried to port the open source operating system onto the proprietary hardware.