1. A game pirated doesn't equate to a lost sale or profit lost.
2. There is no way to measure the actual amount of pirated games on a per copy basis that isn't just thin-air statistics or educated guess work.
3. There is no way to easily subtract from "pirated-totals" ( if we could ever hope to measure it ) those games that wouldnt have been a 'sale' anyway because that person either couldn't afford it, didn't want it ( for anything greater then free ) or simply thought it wasn't worth it. Going around and asking users once they've pirated games if they would've bought it after the fact is unrealistic / unreliable even if you could collect data that way.
4. We shouldn't underestimate how much sales can be boosted by freely spread word of mouth which is basically free publicity/advertising for any (pirated) game.
Pirated games probably do hurt sales to some degree but I don't think it's as clear-cut as "copies sold versus copies copied".
More significant (and more damaging for everyone in the long run) I'd guess is the loss of investors / game development due to loss of confidence of the platform, financial concerns out of fear of piracy or even opportunistic slander from competitors (after it's opened up to piracy), that devalue the console if it causes a sudden lack of support from good game devs coming in.
thats exactly right, but we do agree that if there was no opportunity to play roms whatsoever, actual game sales would be better, if only by an undefined amount, right?
imagine a world that never knew about pirating, there wouldnt even be people saying "im not buying this 3ds, im waiting until its hacked" those people would either not buy anything at all, or save up for that stuff, the same way they save up to buy a book, a tv, a new car or candy. they would obviously play less games, as they cant freey pick every single one, but in the end, they would pay more than what they would pay otherwise.
also, that word of mouth argument... i dont really believe it to be very true. there are so many sources for information besides fellow pirates (and theres a reason i write fellow pirates), that we can indeed underestimate the impact here. yes. when i tell my friends a game is good, it will probably mean a little more than the ad on tv, but unless you lie to all your friends about your pirating habits, if they are really interested, they will ask you for a link or if you can put it on a usb drive for them. go ahead and try telling your friends why they should throw out 50 bucks for a game, they know they could get from you for free.
when i showed my friends kingdom hearts days on my back then new flash card, they didnt ask me where to buy that game (even though they did want to play it) they asked me where i got the flash card and how much that costs.
similar with hacked wiis and other consoles way back till the ps1 and stuff. people, parents and kids alike ask people with hacked hardware "where do i get this free game stuff? how much does this chip business cost?"
well, i guess what i'm trying to say is, yes, we cant know anything in hard numbers, we know that pirated is at most potentially a lost sale, but we do know that as far as piracy goes, the losses outweigh any possible gains. however negligible the difference may be, it really just needs a handful of people thinking "by buying a flashcard, i can save a ton of money".
even if just 5% of the pirates stopped buying their games when they got access to the right hacks or flashcards, and even if they otherwise would have bought just like 4 more games, the greatest hits that they really needed to play, at a greatest hits/platinum/goty price level, thats still a loss. yes, 5% and 4 games are made up estimates, but they are low estimates. as far as i see it, it would be much more realistic to say that theres just about 5% of people that DIDNT entirely stop spending money on real games. I sometimes buy games I believe were very good, but I know I would have bought more if I didnt have the alternative. I would have made mistake and idiotic purchases, I would have spend 10 bucks more to play a game earlier, these numbers do add up.
again, not having any hard numbers, but just look at the size of some of the bigger hacking communities out there. it is much more likely that they cause more financial damage, than benefit, isnt it?
at least for the gaming industry, where saving up would otherwise be pretty manageable