The PS3 has been officially hacked allowing for backed up games to be played off internal or external hard drive. The original hack was released a few weeks ago as a USB dongle that mod chip suppliers were selling for $170 US. Hackers have now found a way to program their own USB dongle with the Blackcat programmable USB kit. This sells for $30-$40 depending on where you buy it.
Sony has been very proactive in patching security holes in the PS3 firmware; even going so far as to remove the install other OS feature which allowed users to install linux.[1]
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