Cartridge based console systems did not have modchips produced for them. They usually implemented copy protection and regional lockout with game cartridges, both on physical and hardware level. Converters or passthrough devices have been used to circumvent the restrictions, later on flash memory cartridges to copy game media became available. Early in the transition from solid-state to optical media, CD based console systems did not have regional market segmentation or copy protection measures due to the rarity of user-writeable media at the time.
Modchips started to surface with the PlayStation system, due to its popularity and the increasing availability and affordability of CD writers. At the time, a modchips' sole purpose was to allow the use of imported and copied game media.
Today, modchips are available for practically every current console system, often in a great number of variations. In addition to circumventing regional lockout and copy protection mechanisms, modern modchips may introduce more sophisticated modifications to the system, such as allowing the use of user-created software (homebrew), expanding the hardware capabilities of its host system, or even installing an alternative operating system to completely repurpose the host system (e.g. for use as a Home theater PC).