ADDIT: @JdeRau : I wanted to add, that article to which you linked is very impressive, and well done. It provides a wealth of basic information. But I'm not so sure that the data used to reach conclusions about the impact of DRM on piracy is as vaild as it needs to be to warrante\ the conclusions reached by the author.
What the data presented in that article do not address is the degree of correlation between "popularity" and incidence of piracy. Noting that the top ten most pirated games tended to be very popular tells us nothing about the incidence of piracy among the most popular games. To address that question, we would need a sample of games selected at random, and in which each case in the sample was independent of the others. We would then need, a measure of its popularity, and a measure of its victimization by piracy. These measures would have to be comparable (meaning, we could not use pre-release indicators of "popularity" for some games, but then use Gold Edition cumulative sales numbers for others). The other thing is that this data does it tell us anything about the rate of popularity among games as a function of (i) their "popularity" (whatever that might mean); and (ii) their reputation among consumers. That is the key point I'm focusing on. I would not be surprised if some measure of "popularity" such as pre-orders or total sales did indeed correlate with victimization by piracy. But what I'm hypothesizing is that there is likely to be a separate and significant effect (and potentially more important effect) resulting from the reputation of the developer/publisher/distributor. That is what Wardell has argued: if you are beloved you are less likely to be pirated. Not to mention that, if someone is going to pirate you, is there ANYTHING you can actually do that will make them more likely to buy the game? He seems to think not.
presence of intrusive DRM appears not to increase piracy of a game. For example Call of Duty 4, Assassin's Creed and Crysis all have no intrusive DRM whatsoever: they all use basic SafeDisc copy protection with no install limits, no online activation, and no major reports of protection-related issues. Yet all were pirated heavily enough to have the dubious distinction of being in the Top 10 downloaded games list. But strangely absent from the list are several popular games which do use more intrusive DRM: BioShock, Crysis Warhead, and Mass Effect. This indicates quite clearly that intrusive DRM is not the main reason why some games are pirated more heavily than others.
Relatively high incidence of piracy in games that use less intrusive forms of DRM does not stand as proof that "intrusive DRM appears not to increase piracy of a game." All it shows is that, at minimum, there is not a perfectly correlation between DRM and piracy.
ADDIT*2: Herein is I believe the fundamental issue at stake (bolded terms added by me for emphasis)
The argument is straightforward and both intuitively and logically sound: for every pirated copy of a product, there is some potential oss of income to the producer of that product. This is not the same as saying that every pirated copy is a lost sale. What it actually means is that firstly some proportion of the people who are pirating a game would have bought it in the absence of piracy.
Here I believe the author has contradicted himself, at least implicitly. He notes that actual shrinkage of revenue from "piracy" is potential, or hypothetical. This is exactly the point reflected by Wardell when he says
http://ve3d.ign.com/articles/news/46282/Brad-Wardell-Interview
GameStop recently broke the street date on Demigod, and you've said that it could be a test case for just how rampant piracy is. Is it a problem?
We know that piracy exists in massive levels. We don't put any copy protection on our retail CDs. We do know, because our games connect to our servers, how many people are playing the pirated version. It's huge. I mean HUGE.
Demigod may be the most popular game in a very long time based on the numbers we're seeing. That said, our position has been that 98 percent of those people would never have bought the game. I don't want to do anything that inconveniences our legitimate customers because even if I stop all piracy, I don't agree that it would noticably increase our sales.
Piracy is more of an annoying thing. It's an ego thing. You put your heart and soul into a game and you see someone playing it online who stole it. It pisses you off. You're just really mad. You have to take a step back and say, "if you had stopped them from pirating it, would they have bought it?" The answer is probably no.
Wardell sounds like a smart business man to me. Respectful, reasonable, and gracious too.
. . . Then are noting that the shrinkage from piracy is merely a "potential," (which Wardell scoffs at) the author says that what it _means_ is that some pirates would have bought the game.
While that may be the hypothesis, as far as I'm aware, we have no proof of this. Indeed, proving it would seem to be a VERY tricky business of consumer psychological research. If there were actual RISKS involved in being a cyber "pirate" as there are with say, breaking into someone's house or pick pocketing someone, then I would be far less skeptical of this hypothesis. However, because it is effectively risk-free to pirate digital versions of intellectual property like games, we have to ask ourselves very seriously WOULD those pirates have actually bought the thing in the first place.
Addressing piracy, promoting our gamer sub-culture, improving the games, and promoting our consumer rights as gamers, all hinge entirely on this point.
We must effect a transformation of our sub-culture in which would-be pirates perceive risk, if not from legal forces, then from social forces manifest within our sub-culture. That is the only real and viable solution to this epidemic (short of dramatic new legal developments in enforcement and prosecution). These efforts by the publishers to impose on US law-abiding consumers with software-locks-and-keys that do not actually reduce piracy in the first place is in one sense unconscionable because it fails to accomplish what it claims to be setting out to do. But I have to acknowledge, what they are doing, is hassling us, putting pressure on US, the law-abiding gamers, to change our sub-culture.
Maybe it is actually beyond our capacity to sufficiently vilify piracy that it becomes a pariah like status, but I believe if we gamers really want to promote our hobby, that is what we need to be thinking about accomplishing as a community.