Yes, it is possible for the moderm to go bad, trust me the same thing happend to me, just take it to Best Buy or where ever you got it from
and then exchange it for a new one or you could return it and git your $ back!!!!!!!
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If you are referring to the removable modem that attaches to the PS2 expansion then yes you can remove it and still play games offline with no issue. You will be unable to play games that offer online content though most will still allow you to play a single or offline campaign.
So long as the modem uses an ethernet connection, it should work. The ethernet cable that you normally route into your computer, simply plug it in the ethernet plug on the back of the ps2. When you use an online multiplayer enabled game, you'll simply have to go through the setup of it registering your information.
Turns out you can absolutely use the PS2 to play online games!
You need to buy a NETWORK ADAPTER for it, which is in itself a 56K
modem that includes a ETHERNET plug, so you can connect with just a
regular phone line (slow), or connect your broadband modem/router by
way of the ETHERNET cable (fast!)
You may need to buy a MEMORY CARD, and even a HARD DRIVE for some games, so its not free there.....
The information is a bit extensive for all the questions you may have,
so I have included the following great links for you to peruse.
There should be a setup disk that came with the network adapter.
Put that in, and it's a simple walk-through.
If you don't have it, then Madden 08 has an automatic connection sequence, just go online with it, and it should do it all for you.
If you have a cable connection (Cable Broadband), then its going to DHCP connection (or automatic) If it's DSL, then you may have a static IP address, and you may want to contact your ISP for further help. You would need to manually assign an IP address to your PS2.
If you have it set up correctly, and its a cable modem you've got, then you may want to reboot everything.
Unplug power to the modem and router and also make sure the PS2 is off.
Plug modem back in, then router, and turn PS2 and try connecting agian.
On some models, the Ethernet comes from a PC board searate from the Motherboard. Now you can get a motherboard replaced for under $60. Check out the playstationclinic. Nothing you can really do if the Ethernet Chip is blasted.