IMO Piracy does hurt the gaming / music industry. However, the amount of damage caused by piracy is very difficult to determine.
1. It is impossible to say that a person who downloads a game would have never bought it. Yes, they may never buy it at $60, but what about in 8 months when it's $4.99 during a sale on Steam?
2. PC game piracy is more damaging to the industry then movie / music piracy. With music / movie piracy there is the possibility that the pirate would go see the sequel to the movie they downloaded in a theater, or to a concert of the artist of the music that they downloaded. The only way that piracy would work out well for the gaming industry is if the pirate bought a copy of the game they pirated, or they buy the sequel of the game they downloaded. Lets be frank, the majority of people who pirate a game are not going to go out and purchase a copy if they like it.
IMO this is why there is a lack of great single player games.
I find the argument that people are downloading it to try out the game to see if they will buy it to be quite a thin argument. Read some reviews, and go watch some gameplay videos from You Tube. If you still aren't sure you want to buy it after that then it's not worth buying. Or better yet, wait 6 months for it to show up in a major sale on Steam. Even if the game turns out to be crap you are not out much money, and you didn't have to break any copyright laws. Edited by AtomicFrost - 11/28/11 at 1:20pm