To question if the industry would survive without DRM you are making an assumption that DRM actually combats piracy and that piracy is a major threat to the well being of the industry. This is the official reason given by designers and policy makers more often for the investors than the customers but it is not so simple.
In many cases the "effective" forms of DRM are ham fisted into games in a manner that negatively impacts the game. This creates a worse product for the customers that purchased it and have to deal with the DRM. By comparison the means of Piracy even working on games that have DRM is to subvert the DRM and make it no longer functional.
So paying customers have to deal with the negative impact of DRM and Pirates don't. This ends up creating a situation where legitimate consumers are paying for a worse product than what those that pirate the product get for free. Piracy itself is a small inconvenience but when the negative hassle involved with pirating a game is a far better experience and provides a far better product than paying for that product and jumping through all of the hoops demanded by it then the publishers are punishing the customer for actually buying the game under the banner of preventing piracy.
One of the reasons why it is important to mention this is because it is impossible to prevent piracy. The internet as a whole has more man hours and more resources available than any company, organization or government can hope to match. The internet is the pool of resources that said groups draw their candidates from and said groups can only afford a limited number of employees while the internet practically runs on volunteered time.
Examples of DRM being a golden shower on the consumer are not few and far between. Any launch that uses an Always Online form of DRM fits this bill as these games are in an unplayable state when the servers managed by the publisher fail. A good portion of customers that purchased D3 went on to pirate the game so they could actually play the game that they paid real money for for a specific and non-isolated example. No doubt the up and coming release Drive Club with be another page in this chapter.
To make the claim that without a means of preventing piracy that the games industry would collapse is just misleading. One of the most critically acclaimed PC series The Witcher released without any form of DRM and despite claims and statistics showing massive amounts of downloads through torrents the original The Witcher not only turned a massive profit but also funded The Witcher 2 and The Witcher 3 is currently in production. What was a PC only title got the funding to be able to pay for porting the second game in the series to consoles as well.
In addition both of these examples provide a ground as to how you cannot correlate Torrent Downloads to Lost Sales, something that the games industry is often guilty of trying to use as a metric to justify DRM. The reasons why something was downloaded through a torrent or the possibility of a lost sale is much more complicated. Region restrictions on sales and DRM avoidance either due to DRM breaking the game, unreliable Always Online structure or Limited Downloads are two good examples of factors that break that correlation in half. There is no ratio that one can make between Torrent Downloads and Sales Lost as a torrent download doesn't mean that they haven't purchased the game or that they would have ever purchased it in the first place.
Rather the opposite, one can argue that DRM actually drives customers away from purchasing the game and toward pirating it instead. I doubt there is a single case where someone bought the game because DRM prevented pirating it yet I can think of several games that I have refused to purchase because of abusive DRM included in the title when I would have purchased it without it. I can also say the same about several negative game design directions, like Micro-Transactions in Full Title Cost games.
To think that Piracy is the norm is to think that your customers are criminals by nature. I subscribe to the idea that Piracy is very much a service and quality problem, if the pirates can provide a better product than you just by removing the aspects you've wedged in to try to stop piracy then you are merely promoting piracy instead. When you refuse to sell your digital product in certain regions of the world, when you use physical world borders to limit a digital world without borders then you promote piracy.
Steam is an excellent living example of this as well. It is without a doubt a form of DRM but it operates in a manner that enables, empowers and provides additional conveniences to the consumers that choose to purchase through that DRM. Steam constantly keeps games up to date, offers regular discounts, has been the most successful example of price points changes over time, offers standardized internet connectivity tools to developers, offers cross title promotions (incentives for purchase, like content for other games or even new games [Got Darksiders for Preordering Space Marine for example,]) and provides a community hub for modders through the Steam Workshop. Steam will always have it's problems, always have it's detractors, and always have consumers that will forever refuse to use Steam but Steam has become a success by proving that you can sell video games in Russia (a region that was claimed to be a failure to attempt sales in due to rampant piracy) as well as by getting customers to accept a very moderate form of DRM by providing more conveniences and services than what the DRM detracts (Seriously, I remember PC gaming when you had to manually patch games by contacting the developer to get a patch disk in the mail. Dark days of PC gaming.)
Piracy has always been a scape goat for practically everything. The music industry blamed Piracy for lost sales when it was really their practice of forcing customer to cough up the cash for a full album when they only really wanted one or two songs on it, a practice proven to be anti-consumer when platforms like iTunes were released that sold songs individually and reported record earnings. The film industry and MPAA has blamed Piracy for a loss in box office earnings and post release media sales (DVD/Bluray these days) when the issue has been with a dramatic drop in overall quality of films during the past few decades, declining consumer experience at movie theaters, loading post release media with disturbing amounts of garbage (preroll ads, lack of user control in navigation,) a complete and total lack of understanding about "The Window Of Relevance" (releasing DVD/Blurays months after the film has been out of theaters,) and still being on this runaway Hollywood budget of excess for the purpose of excess. Yet Netflix and similar services continue to be a success.
In short, DRM drives away customers and treats customers like criminals. It assumes Piracy is the default course of action and that purchasing products is a last resort by the majority, an outlook that is blatantly false. The design of it is inherently anti-consumer and disrespectful of your market to think that it is required.