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No, not completely but it is seriously screwed. Here is the problem as best I can figure it out. Sony had this security plan for online gaming/piracy prevention, they would use a root key that would check/be checked by any software that tried to run. If the software did not match, it would not be allowed to run. Copies of games would not have it, so theres the piracy prevention and hacks would not have it so that "protected" online games. I put protected in quotes because it was not perfect. Any game information stored on your PS3 could be copied to a flash drive, edited on a PC and copied back so cheating still existed but it was fairly limited in scope. Developers, like Infinity Ward, used a combination of this security and storing most of your online characters data on their servers, in order for anyone to do anything with it they would have to be able to run a hack and without the root key they could not do that.
Enter the douchebags, George Hotz and the group that calls themselves fail0verflow (real neat name they got there). When Sony first released the PS3 they allowed a version of Linux to run on it so that people could buy the PS3 keyboard and use it like a computer. This was a bad plan as hackers promptly went to work using this to hack/pirate games. Sony decided to simply get rid of the ability to run Linux, getting rid of a functionality that some people really wanted. In particular, the hacking community really wanted it. The newly pissed off weenie boys then went to work trying to get at the root key. Their claim is that they only wanted it for honest uses and that they are anti-piracy and very much anti-hacking, so they released it to the world. They are now completely shocked and amazed that anyone would be using their hard work for such bad things. Douchebags, the lot of them, Sony, fail0verflow, Hotz as well as any developer trying to claim they can't do anything about it (and I'm looking straight at you Infinity Ward).
What does all this mean for PS3 online gaming? Well, a few things...
Sony - They are pretty screwed. As far as I can tell, a firmware upgrade is not going to fix this but even if it can, all games previously screwed would still be screwed and all new games would be screwed in short order now that the douchebags that released the root key have also released how to get at it. A hardware upgrade could be done to fix it but again, all old... still screwed, plus since the cost would be massive for Sony, I see this as having zero chance of happening. To make matters worse, they will lock down the PS4 like fort knox and online will almost certainly go the pay-to-play route.
The Developers - On their existing games, they can either throw up their hands and claim it's Sony's fault (like the douchebags at Infinity Ward) or they can get their programmers to work on a server side patch that would use their own security instead of relying on the now broken Sony security. Will they do this? I'm betting most of them, no. Though several are already claiming that you can look forward to it when you buy their next game... yeah... right.
fail0verflow and Hotz - Nothing, they will simply remain douchebags. Oh, Sony is suing them but they won't win, fair use and all that.
The Gamers - I'm betting most online games will be fine. You look at something like Sacred 2 that has online, it kept all of your player information on the PS3 and could have been hacked easily but it never had a huge base so no one bothered to make any hacks for it. The games that will be hurt the most will be the popular games that most of you really want to play online. In short order all of the most popular online games will have the hacks that have destroyed MW, MW2 and Black ops (though some are saying Black Ops has been fixed and some are saying it is not, it appears they are trying though). Gran Turismo 5, Sacred 2 and Borderlands are they only other games I play online right now but have stopped GT5 as it will certainly be a target soon, Borderlands and Sacred 2 are probably old enough to be safe. BUT BE WARNED - If you currently play a popular game online, it is only a matter of time until it is hacked in a way that can undue any work you have completed. Even if your games stores it's data on your PS3 it can be altered, so can things like trophy's (they can all be turned on or off at the hackers whim)
The bottom line - You know... I don't really give a shit if someone wants to cheat their own game but when it extends to actually harming another players character in a permanent way, you are way over the line. Hotz and company knew exactly what the result of their releasing the root key would be and did it anyway and some asshole company will probably reward them with a high paying job for it (Now I'm looking at you Blizzard, you started that shit). Back in the day, when someone was a hacker they were doing what they were doing to show they could, as a prestige thing. Those days are over and have been for a long time, hackers are nothing but pieces of shit now. The whole situation is very disappointing.
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