It was assumed that the PS3 had been dealt a devastating blow when the hacking group fail0verflow announced that they had broken the PS3's encryption and infamous hacker George "GeoHot" Hotz subsequently released the root key that allowed unauthorized code to be run on Sony's console. However, Sony claims that they can fix issue and keep their console secure.
Since then Blu-ray and PSP root keys have been discovered and Hotz has gone on to release his own version of the latest PS3 firmware (3.55) that lets homebrew applications be run. It was thought that because the root key for the system has beeen discovered that it would be extremely difficult to fix or would require a hardware update. Sony has now stated that they can stop all that with a s update to the system.
“We are aware of this, and are currently looking into it,” Sony told Edge magazine. “We will fix the issues through network updates, but because this is a security issue, we are not able to provide you with any more details.”
This is likely to be news to the hackers that originally found the exploit. And it probably won't stop them from trying again even if Sony does manage to block it.