I'm a geek. I'm not shy about that fact. Being a geek means you have friends who are geeks. Having friends who are geeks means that when a new game or movie comes out, you're sometimes offered a copy before it's even been released. Piracy is big, especially in the PC gaming world. Less so for console games, but don't think it doesn't happen.
Games are expensive. It's a fact. If you take into account the level of quality people want in their games these days, and what it costs to make them, it's not surprising the unit price is so high. And don't tell me movies are cheap games should be. In movies they only have to worry about how it looks, not what'll happen if the player decides to do something ridiculous.
So when you're offered an opportunity to play the game, no strings attached, before you pay for it (if ever), people tend to go for it. But what are you missing?
Many times the process of cracking the game breaks some aspect of the game. Things like online play or achievements. In some cases the game may crash because of the workarounds involved. Some people may seize the opportunity to plant and distribute their virusses through these "cracked copies". Often, in an attempt to crack the game before the official release date, an unfinished or reviewer's copy of the game is used, which may include critical errors. Cracked games can also not be patched, leaving it open to vulnerabilities or flawed gameplay. For the online play that did work with the cracked version, the fact that you can't patch it means that now you can't play online because the servers require you to have the latest fixes installed.
And worst of all, your experience of the game is tainted.
As a programmer I know how it goes. You sit for days writing a small part of the game or program, but you can't get it perfect. You've been working so hard on the whole project that you think this little problem can be fixed later, or is really not so bad. So someone gets a pirated copy of your game. They didn't pay for it so they're willing to install it and try it for an hour or two. If they don't like it, they skip it. Or worse yet, they go onto public forums and discredit your game because of that small niggle in gameplay you decided can be left. They are in general more critical of the game.
If they had payed for the game, they would see the niggle, but think to themselves "It's really not that bad. The rest of the game makes up for it. It's a good experience in general." Because they payed for it, they want to get their money's worth so they give the game a proper chance.
Personally, I enjoy a game more if I have the physical package I can put on my shelf. Often the game comes with some special trinket, or there's a collector's edition. It makes it an experience instead of a pastime while you wait for your pizza to be delivered or whatever.
The last problem I have with piracy is DRM. I know it sounds backwards, but it's simple. When games are pirated, the producers don't get money for it. So they need to stop a game from being pirated. They end up licensing outside software to do it for them (Starforce or SecuROM). These methods are never perfect because no two computers are set up the same, so by doing so you introduce a margin of failure to your games: a number of buyers for whom the game will not work because something on their computer isn't how it should be. In some cases it also introduces an install limit. Someday I'm going to look at an old game and think "I want to try this again", but when I try to install it, the game will firstly require internet access to a service that may no longer be available. If that service is still there, it may tell me that I've installed the game too many times. How can this be? I'm sitting with the disc in my hands. I payed for it. The slip is still in the case, although the writing has faded a bit... If I pay these exorbitant amounts for my game, I expect it to work when I want it to.
Even games with DRM gets cracked. Sometimes the DRM is only there to stop it from being cracked on release day, but it will be cracked within a week. However, it ruins the game for years to come.
Unfortunately piracy is here to stay. Unless they can find a way to make sure you can't do anything without a legal copy (WoW did it) you can really only rely on people's good faith and support.
Words:
"In the case of pirates, say, I would like to know whether that profession of theirs has any peculiar glory about it. It sometimes ends in uncommon elevation, indeed; but only at the gallows."
-Herman Melville