Source: A series of sources conveniently amalgamated by Joystiq.

The official story: "We have made no official statement regarding coding for PS3 games."--Sony spokesperson.

What we heard: Given the billions of dollars it sinks into its movie, music, and games divisions, it's little wonder Sony is big on digital rights management. The company has implemented anti-copying measures for years and has admitted it has been installing cloaking rootkits to hide DRM programs. (It has since issued a patch to remove the rootkit.)

Those familiar with Sony's CD DRM practices were unsurprised when Joystiq reported that the company has patented DRM software that could prevent PlayStation 3s from playing used or borrowed games. The site cites US Patent #6,816,972, which is for "a device and method for protection of legitimate software against used software and counterfeit software in recording media." Specifically, the patented technology would verify that when software was inserted into a "machine" (read: console), it was registered to that machine. If it couldn't, the technology would prompt the machine to shut down, preventing the software from being accessed.

Such measures would be fine and dandy, were they targeted at pirated software. But the patented tech--which bears the name of Sony Computer Entertainment president Ken Kutaragi--is specifically designed to prevent used software from being sold. "Since only titles for which legitimate software has actually been purchased and which have been initially registered in the machine table can be used, resale (so-called used software purchase) after purchase by an end-user becomes practically impossible," it reads. Such measures would also prevent lent or rented software from being played.

But would Sony incorporate technology from Patent #6,816,972 into the PS3? On one hand, doing so would guarantee that each gamer would buy a new copy of each PS3 game, theoretically meaning bigger sales to help defray the steep cost of next-gen development. It would also remove the PS3 from the used-game trade, a market from which Sony gets no revenue.

However, there would be some major drawbacks to implementing Patent # 6,816,972 technology into the PS3. It would mean forfeiting the rental market to Microsoft's Xbox 360. Though there are signs that the game-rental stories are in decline--Blockbuster Video is reportedly shopping around its GameRush subsidiary--Netflix-esque services like GameFly are gaining in popularity. Then there's the fact that many people can't afford to buy a whole lot of games. When presented with a choice between a console that does play rented games and one that doesn't, which way do you think they'll go? There's also the risk of sparking a blacklash like the one currently raging over the BMG DRM rootkit.

[UPDATE] While US Sony reps think the best way to deal with gossip is silence, Sony Europe spokespersons have apparently decided to put this particular rumor to rest. According to the London Guardian's
tech blog, SCEE PR manger Jennie Kong blasted the rumor as " false speculation." "PlayStation 3 software will not be copy protected to a single machine but will be playable on any PlayStation 3 console," she told the Guardian. [Thanks Lefein and stoner02]