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A modchip is a hardware device used to modify or disable built-in restrictions and limitations of many popular videogame consoles. more...

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These modifications can bypass region coding, digital rights management and copy protection checks for the purpose of running copied game media, software intended for other markets, or homebrew software. They are used mainly in systems that are CD/DVD-based, due to the wide availability and low cost of blank media.

Modchips typically require some degree of technical acumen to install. Most commonly, modchips must be soldered on to a console's motherboard, although for some systems there are no-solder install kits (which instead rely on the precise positioning of electrical contacts within the case) and external devices which provide the same function.

In addition to games consoles, modchips are available also for some DVD players, to defeat region code enforcement and user operation prohibitions.

History

Non-CD media based systems, such as the Sega Master System or the NES, did not have modchips produced for them. Instead they often used converters or passthrough/cartridge-like devices to circumvent regional lockout, and flash cartridges for back-ups and piracy.

The fifth generation of video game consoles was the first to use the CD medium for storing game software. Early CD media based consoles, like the Panasonic 3DO, did not have any method of regional lockout. Neither did the 3DO or the Sega CD have a method of blocking burned CDs due to the rarity of CD burners at the time the systems were released. For these reasons, no mod chips were released for said 'earlier' fifth-generation consoles. It wasn't until the PlayStation arrived that mod chips started to surface.

Fifth-generation consoles

PlayStation

Early modchips for the PlayStation were soldered into the system. Later, they were commonly built into game enhancers that attached to the parallel port on the back of the PlayStation. These are referred to as external modchips. Since these chips do not require the PlayStation's housing to be opened, they are both simple to install and do not void the PlayStation's warranty; the user can simply detach the game enhancer if necessary. Today this is probably not an issue since the PlayStation has not been sold at retail for several years and any warranties have likely expired. There are some drawbacks to the external modchips. Primarily, it requires an original disc (any disc) to boot the console, which must then be swapped with a desired backup. This is inconvenient since discs must be exchanged every time the console is powered on or reset. In addition, the track layout is read from the boot disc, so, for example, red book audio (typically background music) will not play off a backup unless the boot disc has at least the same number of audio tracks.

Read more at Wikipedia.org