Person A buys a game at full retail price (£40, £5 to publisher*) then sells that one, legal, game for £20 to Person B (£20 to person A, £0 to publisher). Person B only has £20 and could not have bought the game new. Person C buys a game at full retail price (£40, £5 to publisher*) then packages it up in a .torrent and distributes it to 100 other people. C to CX (if anyone cares) who only have £20 each and could not have bought the game new. Each way the publisher gets the same amount. Right? Wrong! If each of those 100 people had to buy a second-hand copy that would still require 100 new copies to have been bought by 100 people, so the publisher would have £500 by now. * = Made up numbers, but if the music industry is anything to go by then maybe 8-10% will end up with the people who made the damn game. I don't care though, games these days are crap.
It was a bundle of indie games. Humble Indie Bundle, iirc, but am prepared to be wrong. There were a few scenarios put forth by the creators as to what some of the "pirated" copies may have been, such as redownloads of purchases copies, but it's generally believed that a fair number were pirated. As a general comment, it's things like that which make me as a gamer argue for DRM. Yeah, it's restrictive and hurts good gamers (see Astral Wanderer) but stopping people like those who pirate potentially $.01 games is worth it, imo. That's a good argument. Money to the seller is money which will likely go back into the gaming market. It's also why I never use game shops if I (very, very rarely) sell a game. They suck so much money out of the gaming market since not all of their profit goes to buying new copies of games. Much is lost in leases and wages which aren't needed with the advent of things like eBay. Also a nifty way of looking at it. Neither one is as good for the publisher as all first hand, but at least second hand copies are some profit. Though I have to say, the "they can't afford it and would never buy it" rationale is generally bull. Wait until your next paycheck, skimp out a little bit on spending in another areas, wait until your next allowance payment, mow your neighbor's lawn. All ages of gamers have options. People with access to multi-hundred dollar consoles/peripherals/PCs have ways of getting money. It may take time, but it can happen and is never an excuse for piracy.
I'm one of the worst I suppose as not only do I not agree with piracy, but I do USE the second hand system to my advantage. I first buy the game at full price, usually through Game, get the double reward points for pre-order, play the game as quick as I can without missing anything, trade it in and then if the game is a good one that I feel I would like to play again I buy again on ebay or in the shops for a fraction of the original price some time later. Just to give you an example, I got Final Fantasy X on pre-order for £25.99 from game, got £2.50 in reward points, played the game through twice within 3 weeks, traded it in against another game and got £17 for it. Just recently I managed to reaquire FFX for £2.99 including postage on ebay. Looks pretty good on the PS3 with upscaling and smoothing turned on, especialy the Blitzball mini game. It used to make the game just under half the price but Game now give less for the trade-ins so the game may cost about two thirds of the original price. They must have caught on eh? I will say one thing for the piracy hackers though and that is the no-CD cracks for the PC are very handy and save on ware and tare of the media.
I would like to focus more on the 'would never buy it' part actually. My gaming medium of choice is the 360, where new games cost ~£40 if they're a big release. I'm fortunate enough to have quite a lot of disposable income, my paycheque is probably smaller than all of yours, but I'm 21. I live in what are effetively student digs, have no mortgage, cars, kids, live-in partner or loans. £40 is still too much for me. My brother recently lent me Halo: Reach for a few days, worringly after he'd finished it after 4 days of ownership. Sure enough I finished the game, on heroic, in three sittings. The campaign would have cost me £4-5 an hour if I'd paid £40 for Halo. That's just a rip-off, and I will continue to buy second-hand.
There are two ways of looking at situations like this - that it's great that people are prepared to pay for games, despite all the hassle, when they don't need to ("the glass is half full") or that it's dreadful that there are those out there who aren't prepared to do their duty and reward those who provide us with such great content ("the glass is half empty"). One problem with the half-empty approach is, as you note, the problems it causes for legitimate customers. Another problem is that it turns the principles of business upside down - companies should be trying to provide what customers want, not alienate them. If someone is pirating, they're not a customer and their views should be disregarded. Focusing on DRM involves paying more attention to such pirates and, almost inevitably, leads to an attitude of contempt for all gamers. Other downsides include higher support costs (DRM licensing fees, technical support for users having DRM-related problems) which tend to be recurring charges compared to the once-off profit from the original game sale - and the loss of sales to those who object to such DRM. With the half-full approach, companies can focus on providing better value and building customer goodwill. Any loss of sales to piracy (realistically likely to be around 5-10% of copies made) can be tackled by personal registration (displaying the owner's name on any startup screen - providing a greater sense of ownership), polite requests to register with detected unauthorised copies (as opposed to TitanQuest's fake crashes) and, where feasible, free extras for loyal customers. Offering a wide range of payment options (in particular cashcards to cover those without access to credit cards) is another area most publishers could do better at. The idea should be to catch pirates with honey rather than vinegar - to convert as many of them to paying customers as possible. Game publishers often complain that just a 3-5% conversion rate could make the difference between loss and profit, so why don't they start using more psychology and common sense?
