Approaches vary from on-media mechanisms (SafeDisc), to data encryption (Steam). While many feel that developers go too far in their efforts to stop piracy, there is no clear-cut answer as to whether developers feel piracy actually hurts their bottom line.
The Independent Games Developers Association recently conducted a survey to answer some of those questions. TIGA asked developers how they felt their business was affected by piracy, and what sort of steps they take to prevent it. They were also asked more hard-hitting questions, for example if they feel governments should take action against pirates. While short on information, the article brought out some very interesting notes.
Only 10 percent of those surveyed said piracy was a "significant" threat, which we can interpret to be hurting their cash flow. However, the overwhelming majority -- 90 percent -- indicated that piracy is increasing and becoming more of problem. Only about half felt it was up to the government to crack down on pirates, though the words "slowing broadband" brings into question exactly what methods were discussed.
One thing is clear, however. Most game developers are uninterested in allowing existing infrastructure, such as legal systems, deal with the issue, and are more intent on finding their own solution to piracy.