It is the 2% rule gone horribly wrong (which begs the question if it can ever be right in the first place?) Nintendo is suiting up and taking action against the R4 and other DS homebrew cartridges. When will they realize that there are legitimate uses to this cartridge. Just because some people use it for illegal activity doesn't make the device illegal. Knives have many legitimate uses, but knives can kill people. We don't sue the knife makers though.
If I have purchased a piece of equipment, hardware if you will, I would like to be able to modify it to my liking and have full functionality over the device. Once I hand the clerk my $150, that device is mine to do with whatever I want, nobody, especially not Nintendo, will tell me what I can and can't do with something that I legally own.
The R4 doesn't look like much: just a generic Nintendo DS cart. What it does, however, causes Nintendo no small headache. The device, and others like it, bypasses the system's firmware and with the help of a micro SD card filled with... well, with whatever you want, the cart runs pirated games, emulators, or homebrew games. Nintendo has had enough, and AFP reports that the company is lawyering up with 54 other software companies to sue companies that make and distribute the device in Tokyo, using the Unfair Competition Prevention Law.
The Times wrote a story on the device late last year and pointed out that Japanese retailers are more than aware of the legal questions with the device. "'New R4 shipment has finally arrived! You know what it does! Absolutely no questions will be answered concerning this product...' reads the sign outside one electronics store just off the main Akihabara drag. 'Guaranteed for one week only! Of course we can't explain what the R4 will do...' reads another in the store next door," they wrote. Other retailers don't sell the device for obvious reasons: after you can download every game for free, why would you come back into the shop for legitimate purchases?
While it's easy to see why companies like Nintendo hate the R4, gamers who spend time with hacked devices know how great they are for purposes completely unrelated to stealing games. Making backups of the games you own to pack onto the cart results in fewer lost games while traveling and more convenience. Playing classic games via emulator is a blast, although the legality of ROMs, even if you own the original carts, is questionable. You can also download an almost infinite number of homebrew games and applications that allow you to create music, organize your video and music files, or use the hardware in unique ways. A cracked PSP is one of the most versatile and interesting pieces of consumer electronics available for such a low price, and I've met more than one person who has gotten into amateur game design by learning to code on hacked PSPs or DS systems.
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When the R4 is readily available for sale in most stores, it is a threat to profits not only for Nintendo, but also other developers and publishers, who aren't raking in the dough as much as Nintendo. They're moving to deny piracy, not necessarily homebrew. The PSP is not how they want it to end up.