What does it mean by a chipped game console?

A chipped console is simply a computer game console that has been modified by putting in a computer chip. The chip allows the console to play all games from different regions of the world. Some consoles allow you to play games from one region i.e USA or UK but in order to play games from other places your console must be chipped.
 
The console has a special chip installed in it, which on newer consoles it enables them to run downloaded games from discs. Chipping some consoles could void your warranty or get you banned from things, Xbox Live for example, if the console manufacturer finds out.
 
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