The CPS-3 or Capcom Play System 3 is an arcade system board that was introduced by Capcom in 1996 with the game Warzard (known as Red Earth outside Japan).
The CPS-3 was the last arcade system board manufactured by Capcom. It features a security mechanism; games are supplied on a CD, which contains the encrypted game contents, and a security cartridge containing the game BIOS and the SH-2 CPU with integrated decryption logic, with the per-game key stored in battery-backed SRAM. When the CPS-3 board is first powered on, the contents of the CD are flashed onto a bank of SIMMs on the motherboard, where it is executed. The program code is then decrypted at run time via the security cartridge. The security cartridge is sensitive to any sort of tampering, which will result in the decryption key being erased and the cartridge being rendered useless.
Games became unplayable when the battery inside the security cartridge died, which had to be replaced at cost to the owner. Furthermore, the CPS-3 was only capable of 2D graphics at a time when most games were being developed with 3D hardware in mind.
In June 2007, the encryption method was reverse-engineered by Andreas Naive, making emulation possible. The encryption turned out to be a fairly straightforward combination of rotates and XORs.