@TomSEA: Of course that would solve it all. But DRM is just the wrong answer to piracy. In 2009 I bought 24 games in physical form, of which 17 had DRM in them requiring me to install some crappy piece of software on my system that would constantly monitor if I was indeed using a legal version. You know what I did? I canceled setup, downloaded a pirated version of each of those games and happily played them without DRM.
When will those developers ever realize that DRM only hurts the people that get the product with DRM in it, ergo, the legal customers that actually paid for your product? For hackers, it's like a more challenging bonus when they get it cracked, and usually it only takes hours instead of minutes. For downloaders, it's still free and they only had to wait a couple of hours longer, plus they get the added benefit of the stripped-out DRM. Too bad for those suckers that paid for the legal version, wouldn't you say?
I see the same with every movie I buy on DVD. There are several unskippable commercials and warnings on those legally purchased discs about how piracy kills the business and you can get prosecuted for piracy.
While I understand this point and I'm convinced that everyone should be rewarded for their hard work (I'm a musician myself), the content creators should also understand this: The fact that I'm seeing those warnings means I just bought the content legally, so I'm clearly not the target. Those warnings are the first thing pirates cut out of their versions, so someone that just downloaded a free illegal copy of a movie actually gets a better experience than myself who paid cash for it (money that I also earned through hard work, you know). That doesn't make the downloader less illegal, but it does make me look more stupid.
There's one sentence that keeps popping back into my head (I don't remember exactly where I heard it first): 'If DRM is the answer, you just asked the wrong question.'
One answer in my eyes are services like Steam or GoG. Sure, there's DRM and copy-control there too, but it's totally seamless (at least it has been for me) and the integrated service itself adds lots of features you'd miss when playing a pirated copy. I even bought some games I already had during Steam sales, just so I could reinstall them after reformatting with one 'Download&Install' click.
I think to get rid of piracy (or most of it, it'll never be wiped out completely, just like crime in general) you need to do three things right (in order of importance):
1) Give extra features, like a well integrated web service, to legal customers. But don't make the game solely dependent from it like Ubisoft is doing. I think Blizzard is on to something with their major refresh of Battle.net for example. It's a whole butload of handy stuff, but it's all optional as well.
DLC also started off as a promising way of extra benefits for legal buyers, but it has become just another milk-cow of the developers.
2) Try to cripple illegal versions as much as you can. I remember The Sims 2 for example, where not a single illegal version had the build-mode available. I still don't understand how they did it, but it was a stroke of genius! Sure, you could play the game, but without the building mode The Sims is quite pointless.
In a shooter, this could be implemented by making the guns not function or something, making you defenseless. But how to do this, heck I'm not enough of a programmer for that
In a lesser ideal situation, you could release a pirated version of your own game, but totally soaked in spyware/viruses. Just make sure you flood the download-channels (like torrents and newsgroups) with it and that the version includes a notice that the game was illegally obtained. This notice is to make sure that people don't start believing your game has spyware in it and going online telling it to everybody making sales even lower (which is a risk, that's what I meant with lesser ideal).
3) Don't overdo your prices. Game development costs money, I get it. But €75 for Assassin's Creed 2 on Xbox 360? I'm sorry, but I just won't pay that much. I'll just wait and pick it up for €29 later. The most outrageous thing is that with every new medium/platform, games have gotten more expensive while the actual product you get in your hands is cheaper to manufacture. VHS tapes were pretty expensive to make, yet didn't cost as much as DVD's do now. And Blu-Ray's are even more expensive! But mainly, I get mad when I see a game on Steam costing more than the physical version in a store around the corner.
Just look at Steam sales skyrocketing when there's a sale. And I'm one (or actually several) records in those statistics
Ultimately, piracy is something that will never go away. But people download for several reasons. Some download because they simply don't have the money to purchase each game (like teenagers), some download because it's convenient and easy (just look at how succesfull Steam is, or console gaming!) and others download just because they don't want to pay. My gut feeling (I strongly believe in mankind's goodness, how naive of me, I know) tells me the first two groups are both bigger than the third one. So if you can address those first two groups, you've already regained more than half of the illegal users.
