PIRACY IS NOT THEFT. Lets get that out of the way RIGHT NOW. Furthermore, it isn't half the problem that you think it is.
Russia is known for being rife with pirates, and everybody knows you can't sell in Russia. Right? Wrong. Valve found out that by releasing proper localizations in Russian, and by releasing on the same release date, not only did the game sell well in Russia, but 3x what they expected!
PC game sales are down, and piracy is up, and lots of developers say the PC insn't worth developing for, everybody will steal your product. But again, Valve put games on huge sale, and are finding time and again that ALL TRADITIONAL BUSINESS MODELS ARE FLAWED. As soon as a game is put on sale for a more reasonable price, as soon as the PRICE MATCHES WHAT THE PUBLIC PERCEIVES AS ITS VALUE, sales EXPLODED. Literally Valve cannot believe how crazy successful the sales have been. Thats why ever since the big summer sale, there have been SALES after SALES after SALES.
Piracy is NOT a problem you solve by TREATING THE CUSTOMERS WHO SUPPORT YOU LIKE CRIMINALS. It is a problem where you are already treating your customers poorly. Consider DRM, one of the attempts to fight piracy: IT ONLY HURTS LEGITIMATE CUSTOMERS. Pirates get a BETTER, SUPERIOR product that works offline and doesn't require 3 activations that turn off if you change your video card. When Piracy offers a SUPERIOR product, even people who WOULD HAVE PAID MONEY instead pirate it. You are literally offering to them "by paying money, we will hold you back." That is a business model NOBODY would agree to.
Part of the problem is our abandonment of the concept of haggling in the west. Here, its YOU PAY OUR ONE PRICE OR YOU DONT GET IT. Well, that is naive. If somebody is offering you $50 for a $60 product, would you rather take $0? If you are selling a physical product that costs you to manufacture each one, then maybe the profit margin is too thin to accept that. But with IP, with digital media, the COST OF DISTRIBUTION IS NEXT TO 0. ALL the cost is R&D. So as long as somebody pays you $1, you're making profit. This is why Steam is selling games for $5, and why the Humble Indie Bundle let you PAY WHAT YOU WANT. Did they get pirated? Did people pay 0? Actually, given the choice, people paid MILLIONS OF DOLLARS.
People will happily pay for a product that they get value from.
Not to mention, time and AGAIN, studies have shown that pirates buy more movies and games than non-pirates, and many are likely to purchase the very thing they just pirated. Video games don't always release demos, so some try the game first through piracy rather than spend $60 on a really bad game they won't play after a few hours. We've all been burned by a really crappy game that got marketed to make it appear better. These deceptive practices are what have made customers wary.
THE ENTIRE problem of piracy results from CUSTOMERS BEING MISTREATED and businessmen acting like they rule the world. IT IS THE CONSUMER WHO DRIVES PROFITS.
Biting the hand that feeds IT
