"End-user" piracy is the final link in a long chain of crime, so far down the line that these individual users' theft doesn't have much of an effect on sales, depending how elastic you consider the gaming market to be. Massive cartels based in Asia that actually sell copies of games to smaller distributors on the cheap, are what cost publishers money. These guys not only copy data on game discs, they copy boxes, manuals, and anything else they can get their hands on, producing quality counterfeit material. By the time this material starts circulating in underdeveloped countries, many users don't know they're buying something that's not the genuine article.
Traditional anti-crime raids don't work in a modern age. Every few years, a couple piracy rings are exposed, and little old ladies are arrested for housing 100,000 copies of Jedi Knight in their garages. But they're just one group in a small area; the piracy network is digital, and so is the distribution. Large, for-profit pirating groups are the reason utilities like StarForce exist, but organized cartels have a bit of a track record for circumventing copy protection in rather unique ways. On top of that, intrusive anti-piracy programs like StarForce (which has been known to cause system-wide conflicts on many-a-user's machine), can actually lead end-users to pirate even more. Anti-piracy technology is frustrating enough that even legitimate buyers end up looking for hacked versions of game clients. This often acts as a "gateway drug" for end-users, ultimately furthering the cartels' cause. The mouse is so far ahead of the cat when it comes to digital bootlegging that many companies are starting to realize it's time to let the pirates go, and use them to their advantage.
You see, if a free market is a glowing beacon of capitalism, bootlegging is its dark shadow. Hearken back to the halcyon days when you actually had the option to use word processors other than MS Word. There was a veritable smorgasbord of formats to play with and use; Word Perfect, Lotus, and Word/Works were all vying to become top of the office suite heap. Lotus faded fast, Word Perfect is floating in the ether somewhere, and MS Word is installed on every computer in existence, including those oh-so-swank iBooks everyone's been talking about. Why? Two reasons: great product placement, and the fact anyone in the world can get Word without paying for it.
In fact, the latter reason is a huge contributing factor to the first one. Microsoft has great deals with colleges around the country, which allow students to purchase "student edition" copies of Microsoft's software. The students then illegally copy these special, value editions and give the copies away to all of their friends. Eventually, so many copies of the software are distributed, there's just no reason to look for an alternative. Microsoft wins a format war because their software is easier to sneak into your dorm room than booze.
