A hacker who calls himself  "TheSpecialist" stated that he has installed his own custom firmware into the Xbox 360. He claims that with the custom firmware, he is able to create directly bootable backups of original DVD games. The firmware, claims TheSpecialist, circumvents the Xbox 360’s content checking by ignoring the required disc signatures that are present on retail games. However, TheSpecialist states that he will not release his firmware due to obvious piracy concerns.

TheSpecialist tells us that Microsoft did not sign the firmware that allows him to gain full control of the console’s internal hard drive. On Microsoft’s original Xbox, casual modding is not as prevalent as it was before, thanks to clever thinking on Microsoft’s part using its Xbox Live! online service. The company uses its online service and routinely sends updates to the Xbox, which detects if non-original hardware or software is in use. Many are expecting Microsoft to perform similar updates on its Xbox 360 console.

TheSpecialist claims:

I doubt you’ll see some kind of other hack soon, that lets you boot unsigned code for example. [Microsoft] did a very good job on the [Xbox 360] itself this time. However, they made a big mistake by forgetting about the firmware. They even didn’t remove the debug routines from the FW [firmware], quite amazing.

The 360 has a little bit more advanced protection in its FW than the original Xbox, but still, they [forgot] about the debug routines, that were very helpful to us, and most importantly: not signing the firmware.