Rather than go into 7 pages of history, I'll state my opinions on games and so called "piracy"
Firstly, I'm heavily influenced by the works of Lawrence Lessig [http://books.google.com/books?id=lmXIMZiU8yQC&printsec=frontcover&dq=lawrence+lessig&source=bl&ots=wR_STsE7Wy&sig=Zq7vEXF5uqJifnxIPjm5nLmItpM&hl=en&ei=jyjJS5PQGIzC8wTDoaSdCw&sa=X&oi=book_result&ct=result&resnum=7&ved=0CCkQ6AEwBg#v=onepage&q&f=false], who is currently fighting for an internet that remains significant in this day and age. Basically, he describes how law is used to try to usurp things that are unnatural. The DMCA, for all intents and purposes, is unnatural. Copyright holders use this badly worded document to destroy personal freedoms. (I'll get to gaming in a moment). During the 80s, games were the newest things, our laws reflected a sharing of ideas that lead to this expansion of entertainment. We've had a fair share of games come up. From the NES, to the NEO GEO, to the Wii, games are here to entertain us and wile away a few hours.
I can't speak for the entire world per se, but after watching the industry grow from Nintendo owned to corporate owned, I can honestly say there's been a lot of kinks that need working on.
The gaming stance that supposedly piracy hurts them - Let's get the facts Videogames made 41.9 billion in revenue [http://www.itfacts.biz/videogame-revenues-to-reach-419-bln-in-2009/12946]. Gamestop with used sales, Nintendo with consoles, people are making money on video games. Damn near double what came in ~2008. 21 billion [http://www.msnbc.msn.com/id/28682836]. In no way is this chump change. In no way are these small numbers.
Now, let's look at a few other industries for comparison in 2009 alone. 9.76 billion dollars in the movie industry [http://www.seanpaune.com/2009/01/18/movie-industry-has-a-record-year-in-2008/], ~5-8 billion for music industry [http://www.ifpi.org/content/section_resources/dmr2009.html]
Gobs of money are out there to be made. That much is certain. But where is it being made? What is now taking up people's time? That would be video games, which have usurped movies and music in people's free time (as well as their wallets). That's what those numbers are reflecting. The music industry lost its shot when it destroyed Napster. It's only a matter of time before the movie industry angers people that they don't WANT to see a movie. However, with the advent of 3D, they may be able to claim a niche that no one has right now.
I can go to newgrounds and play excellent quality games without ever paying for another Nintendo game. That doesn't take me out of the market, because I could go to Best Buy or Amazon right now and pick up a DS and go to town. Regardless, my financial decisions are my own, just as the millions of people within the US.
The Law says it is bad - Before 1999, before Napster, there was laws against copying VCR tapes. Eventually, a fair use standard was set. Even though the VCR has infringing capabilities, it can't be held liable for someone wanting to watch a movie at a later time than what cable companies wanted you to do. DMCA has changed the landscape for the worse in the US. It has usurped fair use in any way shape or form, all in the name of arbitrary stagnation.
Piracy - It seems each industry needs a scapegoat to justify a number of things. With video games, it's a justification for DRM (Ex - Ubisoft believing always on connection would work for them), the movies believe piracy is killing their profits, and music... HA!
With movies, it's almost safe to say that since TV technology in the home has caught up to TV technology in the theater, there's little point in people looking at movies as much. With music, you have a lot of people that have paid for music in various ways. Also, few major artists today are as endearing as the artists of the past. Elvis STILL makes more money than almost any major artist today. Take into consideration that a lot of music artists also make movies, because it's easier work and more money. So really, I doubt we'll see Ludacris make as many rap albums as he used to when he can make one move and recoup all of those losses.
Consumer piracy - People usually pirate for a few reasons.
1) Try before they by. Since we really can't corroborate this with any data we just have to accept that a few people will look at a game without paying for it. If it's a good one, they go out and buy it. If not, no money lost.
2) Nostalgia - This has to be the greatest motivator for a lot of so called piracy. As mentioned before, a LOT of games can't be played anymore. Who has possibly heard of Strider? Did you know the arcade game was similar to a Metroidvania type game but the Sega Genesis is a sidescrolling platformer? Unless you have the money for the arcade machine, it's doubtful (unless you've played the games) that you would know this.
3) Import only - See also Nostalgia. Some games are NEVER going to be brought into the US. Mother 3 is a perfect example. With samples of music from the Beatles and a far darker storyline than Nintendo is known for, it wouldn't be the right fit for most people. But it's still a great game with a great translation.
4) "Because I can" - This is the most egregious example of people that don't care. Sometimes, it's to finish a collection, sometimes it's funding. Regardless, these are the people at the extreme, taking from the industry anything it can.
5) Technologists - various sorts. Some are pirates, looking to crack the newest codes. Some are adverts of changing the system so their practices aren't illegal. Basically this group is just out for a challenge.
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Now that I've explained a little about piracy and the groups within, I'll state my opinion on it. I doubt highly that piracy is affecting an industry as much as people make it out that they are. We have gotten along fine for the last 20 years with people allowing others to share movies and games albeit from Blockbuster, Gamestop, EBGames, or a friend. What people are failing to take into account is the very fact that our culture is changing. Music isn't the money make that it once was. It is no longer controlled by industry types such as the RIAA. The movie industry is struggling to find some type of balance between their own control and that of the consumer.
All the while, this massive sharing project we call the internet is supposedly taking money away? Look at the numbers again. There is money out there. My view is that the ones in charge aren't looking for new revenue streams, just pointing their fingers at the most plausible target, making things up instead of fixing their own problems.