Sony Computer Entertainment Inc., of Tokyo, made headlines in August by adding a Web browser to the PlayStation Portable, its US $250 handheld gaming device. The PSP's Web-surfing add-on, available as part of a firmware update, seemed like a smart move in the right direction. But that was only half the story. The browser release, in fact, came in the wake of a war that has been waged between the company and the hacker underground since virtually the day the PSP landed in gamers' paws.

Released early last year, the PSP is Sony's first foray into the lucrative world of mobile fun, and a direct challenge to the reigning champ, Nintendo Co., Kyoto, Japan, maker of the Game Boy and DS handheld systems. The PSP features a stylish wide-screen display and has Wi-Fi capability, which was exploited by hackers who beat Sony to the punch by releasing an unauthorized Web browser months before. The company wasn't breaking ground; it was playing catch-up.

A Web browser is far from the only user-made modification for the PSP. From the utilitarian (adding Internet chat) to the funky (making the PSP a drum machine), PSP hackers are exploiting the machine in ways the company has, for one reason or another, ignored. "To fully use the system," says C.K. Sample III, the author of an upcoming book from O'Reilly Media called PSP Hacks, "people are tinkering on their own." Sony doesn't approve. "We strongly recommend that consumers do not mod their PSP system," says John Koller, senior product manager in the New York City office of Sony Computer Entertainment of America Inc.

Despite Sony's position, for hard-core geeks, video games aren't just for playing—they're for modifying, and the so-called mod community has an established role in pushing both software and hardware forward. The games of id Software, developers of Doom and Quake, were among the first to be hacked, when players began altering audio, visual, and game-play mechanics in the 1990s. Among other things, the changes served to exercise the software engine—the core code at the heart of the game—long after the title was released, increasing the engine's lifetime and salability to other game developers. In Darwinian fashion, id Software sometimes incorporated the better innovations into later commercial releases.

Although some game software developers see value in how the mod community extends their products' shelf lives, hardware manufacturers are less understanding. With its 733-megahertz Intel processor and network capabilities, Microsoft's $150 Xbox has spawned a breed of hackers looking to tap the potential of what is, in fact, an incredibly cheap, powerful computer. Through various copyright-protection countermeasures, such as soldering a so-called mod chip to the motherboard, hackers preempted Microsoft's recently released Xbox 360 by transforming the original Xbox into a hub for playing music and displaying photos.

"The Xbox, and all video-game consoles more or less, were originally marketed as gaming-only devices," says Andrew ("Bunnie") Huang, author of Hacking the Xbox (No Starch Press, 2003). "However, we are now discovering that one of the most popular applications of hacked boxes is the 'media center.'" A media-center Xbox can display photos, act as an audio jukebox, and play movies.

Over the years, makers of consoles and portable game machines haven't taken kindly to such activity, suing and shutting down major manufacturers of mod chips. In 2003, a 22-year-old gamer named David ("krazy8") Rocci, from Virginia, was fined $28 500 and sentenced to five months in jail for distributing mod chips over the Web.

When the PSP was released in 2005, the device struck mod makers as ripe for the hacking, mainly because of its versatility. In addition to playing games, the PSP plays movies and music, and it displays photos. Plus, it's portable. "The fact that someone can create code for the PSP, install and run it, then take it with them on a road trip, on the plane, or even just over to a friend's house, makes the PSP a very desirable target" for hackers, says the webmaster of a popular PSP hacker site, http://pspupdates.com, who prefers not to disclose his name.