Hackers have successfully reverse engineered Sony’s PlayStation Portable firmware, making a downgrade of the console’s new security features possible, it was revealed today.

This will enable users who have upgraded their PSPs in the US and Japan to make use of various non-official functionality the device has to offer, including emulator software, a big selling point of the new handheld. All European PSP hardware shipped with the upgraded firmware, which includes easier file management, media management upgrades, a web browser and enhances anti-hacker routines.

According to various reports surfacing from the hacker community, a security hole in PSP firmware Version 2.0 has enabled a downgrade to be activated. A quick nosey around the Internet shows that the routine to remove SCEI’s upgrade is effective, often throwing up some amusing side effects.

Of course, Sony’s main concern will now be the availability of pirated software and the ever-present threat of solid-state storage being used to carry hacked versions of its UMD software.

Of course, it’s now up to Sony’s engineering executives to decide the next move for the electronics giant. Now Version 2.0 has been cracked, the PSP obviously needs a fresh firmware update, but surely that too will be cracked. Then bear in mind that all the functionality of Ver 2.0 will most likely be available in a hacked firmware modification.

To keep on top of the situation, Sony will have to release regular firmware upgrades, an embarrassing and costly process. Either that or accept that, once released, a gadget on the scale of PSP will never escape the crosshairs of the hacker community.