Stupid. It scans memory for small strings of bytes that match known cheat programs. It doesn't find new ones this way. It doesn't care about anything that isn't on its list. It doesn't scan your drives. It doesn't care that you're using a pirated commercial MP3 player with pirated MP3s in the same directory as your 100GB of pirated movies and pirated offline game software. It's finding software that is known to be related to cheating in their game, which is very clearly related to game security and not user privacy. In fact, I'm now somewhat offended that other games don't do the same thing.
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Link to this comment: http://www.securityfocus.com/comments/newsbriefs/22/800#800