Mod-chipped Xbox = No Xbox Live in AsiaMod-chipped Xbox? No online games for you SINGAPORE--Microsoft has finally launched its Xbox Live online gaming service in Asia, but it faces a challenge unique to the region--console owners may find that they cannot connect to the Live network. Anecdotal evidence suggests that a large number of consoles owned in South-east Asia, Hong Kong and China are "mod chipped" to bypass security systems so as to allow the use of pirated discs. Such modified consoles carry hardware signatures that will cause them to be rejected from the Live gaming network, according to Alan Bowman, Asia Pacific general manager for Microsofts home and entertainment division. Xbox owners will have to decide between online gaming and paying more for software, or staying off the network and paying much less. "No proof" Bowman declined to guess how many Xbox consoles in Asia are of the modified variety, saying that no definitive study had been done. However, he said that "we acknowledge that some people in Southeast Asia---just like people in other regions where we have released Xbox Live---have chipped consoles and will, therefore, not be able to enjoy Xbox Live or authorized aftersales service and support." Following the launch of Xbox Live in Korea a week ago, the next markets were Hong Kong, Singapore and Taiwan, he said. However, he would not be drawn in specifying the launch schedule. "We do not anticipate that modified chips will complicate the rollout of Xbox Live to the region. On the contrary, we think the exciting Xbox Live experience will help reduce the interest in counterfeit video games," said Bowman. Modding is in A walk though the large Sim Lim Square electronics shopping mall in Singapore showed that most shops will offer to solder a security-breaking chip into a console for under US$70, or will sell pre-modified sets. Pirated discs are not as plentiful as they used to be, but can still be found in outlying areas. They cost a tenth of the original. Chin Jun Fwu, program manager of Asia-Pacific online gaming for analysts IDC also declined to speculate on the popularity of modified consoles, but admitted that software piracy is rampant here. "It will be challenging for Microsoft. Southeast Asia is still immature when it comes to legal software," he said. Microsofts Xbox Live will have a good chance of success if an online game with adult appeal becomes available, said Chin. Adults can better afford original software and subscription fees, compared with the usual teen gaming crowd, he said. Microsoft also needs to decide on a sustainable business model, based on either subscription revenue or the upfront price of the game, and organize its resources accordingly. Chin noted that a cautious Sony has yet to launch its PlayStation 2 online service in much of Asia, despite the firm dominating the console market. Schelley Olhava, program manager for interactive consumer services and consumer devices at IDC said that if it were true that a huge number of Xbox consoles in Asia-Pacific were modified, Microsoft might reconsider the ban on such machines connecting to the Live service. An online gaming Asia Bowman declared the Korean launch of Xbox Live a success, thanks to factors such as the high rate of broadband penetration in the country. He declined to specify how many Live add-on kits sold, but said that within days of the launch, 90 percent of those with Live kits had logged in. According to a recent IDC report authored by Chin Jun Fwu, the Korean online gaming market is one of the most mature in the world. Overall, the online gaming market in the Asia-Pacific commanded US$533 million in subscriptions last year, with Korea and Taiwan forming two of the worlds largest online gaming markets. "The subscription revenue indicated that online gamers willingly forked out money to play on the Internet with other gamers," said Chin. Microsoft has zealously fought efforts to crack security systems built into the Xbox. The company has changed the Xbox configuration, sued a leading mod chip distributor, and used its Xbox live online gaming service to thwart mod chips. The U.S. Department of Justice shut down a mod chip reseller for allegedly violating provisions of the Digital Millennium Copyright Act.