I my opinion, there is two types of piracy:
Casual Piracy and Hardcore Piracy.
Casual Piracy:
When a software or product can be easily copied to a media and distributed.
Examples:
Using a cd burner to copy games.
Buying pirated copies on illegal market.
"Copy and paste"
Hardcore Piracy:
When a crack is needed to break the DRM.
Examples:
NO-CD Cracks.
CD/DVD-Emulators.
The difference between these two is that Casual Piracy happens on a large scale, while Hardcore Piracy does not. You can see this in the music and film industry, where piracy is mainstream.
Hardcore Piracy requires knowledge which probably only those who are computer-geeks know. Almost none of my friends knows how to crack a game. This cant be prevented, but the good thing is that this happens on a small scale. I don't think that it hurts the industry that much.
What is happening today is that publishers is putting DRM that only a hardcore PC user is able to maintain, and not the casual user. Not all people have a constant internet connection and not all people wants to create an account to play a game. I think probably most users wants a game to work out-of-the-box, no account creation, no internet required, no serial etc...
That I think is the reason why PC games are staggering. This hardcore type of DRM must be reduced, because hardcore users are only a small scale of the gaming market. You cant prevent them for pirating your game, because hardcore users know hardcore piracy. But you should not prevent casual gamers play your game, like DRM today does.
(My friend bought a copy of Football Manager 2009, but he was never able to play it since the Uniloc DRM required some kind of weird telephone internet thingy which he did not understand how to use).
This is my opinion of how a perfect DRM should be:
A simple DVD-Check for retail games.
An auth-once online install scheme for digital distribution.
An auth-always scheme for PC game rentals (if that ever happens).

^ I like how GOG is. Online distributor with the simplest DRM ever. Log in with your account and download your games. No need for activation on install and other crap. You already "activate" by having the game in your account.

The problem with figures such as those is they that piracy doesn't always equal lost sales because most people have a finite amount of disposable income and therefore can't buy every game they like the look of.
Personally I have only bought one full priced game this year the rest of my purchases are mostly from here and the steam sale, the reason for that, from my point of view, is that one full priced game doesn't seem like a big enough return for my investment of 30-40 pounds, so I will rarely pay that much.

Technically that is not DRM. You can burn those executables to disk and load them up 50 years from now without any need for any kind of rights authentication.

True, but if only 10% of the pirated copies are actually "lost sales", that means they could have increased their sales by 10%, which is huge in a fixed-cost industry.
For this reason, I am not against light-DRM for Digital Distrib AND retail (because I dislike DVD check, living in 2 different places at the same time and bringing my computer from one spot to another).

It is DRM, but it is a generally well accepted DRM.
I think the conclusion we came to was "It is DRM. Nobody gives a crap. Nobody is going to complain about the '100% DRM Free' gimmick"

My prediction is that no-DRM releases for high-profile games would result in increased piracy, but also result in increased sales. Something that many folks miss when considering the topic of piracy is that the amount a game is pirated and the number of units it sells are for the most part independent statistics, with only a minimal link between them (that is often completely overridden by other factors). Basically as it stands people have three options when it comes to a game:
1) Buy it
2) Pirate it
3) Do without it
Eliminating option 2 doesn't automatically send people to option 1, and my instinct is that the vast majority would actually go to option 3. Additionally, as we've seen time and time again, eliminating option 2 is very, very difficult, and the methods used often have the side effect of actually deterring some folks from option 1 (Ubisoft's DRM actually proved fairly effective, but games that used it also saw pretty poor sales on the PC). Releasing games without DRM will see people moving from the "do without it" camp to both the "buy it" and "pirate it" camps, although the important thing for the bottom line of the game companies would be that the number of people in the "buy it" camp increases.

It's DRM in the same sense having to go to the store and buy a retail disk is DRM, I suppose. DRM generally means a publisher or author being able to remotely enforce a copyright (literally a right to copy and/or use). I don't really see how an initial sale is DRM, but if it makes sense to you to equate the two, I suppose that's fine. I'd just hate to see something like "buying a game" equated with the anal probe you get by buying even a boxed copy of a Steam game.
BTW, yes, DRM can work on a large scale. How many games are that hard to get cracked right now. There's a few, maybe 10 or so, compared to literally 1000s of cracked ones. You can read the numbers in any way that you want, if you're a publisher, I guess. If it makes you feel good to count up a 90% piracy rate, great. You're a moron if you consider it all lost sales, but great.
DVDs are just as easy to pirate as games and yet billions of dollars of DVDs get sold yearly. Go figure.
That 200 billion lost to piracy yearly statistic bugs me as it's merely an unbacked up quote that everyone loves to source, but never had any source or supporting data itself. Just some talking head claimed it in some "reputable" newspaper some time several years ago.

No, that wasn't the conclusion 'we' came to at all, but the spin doesn't surprise me.

The "problem" with this analogy is that it is at best completely flawed if not flat out silly.
You completely forget the whole determination/risk level needed and that makes all the difference.
It's not everybody who can pick a lock, and if one thief manage to pick a lock it wont magically allows everybody with an internet connection to pick the same lock. And the risk, there are huge risk involved with robbing a house, neighbors might see/hear you, there might be some alarm, etc...
Now what is the determination/risk level to pirate a DRM protected game ?
Well if you know how to spell google and have hear of this thing called "zeinternet" then you have all the talent needed and the only determination you need is to be able to type the name of the game followed by the word crack... and the risk ? well most of the time you have more risk of being attacked by a shark in your backyard than being caught.
Your analogy it's like saying that a single sheet of toilet paper might be useful in preventing flood and that the fact that peoples still build dikes, even thought a determined enough flood might destroy them, provide some arguments to prove that sheet of toilet paper might be a useful anti-flood protection.
Or... maybe it has something to do with the fact that Starforce is a Russian company...

Or, you know, you could be intentionally over-analyzing things :p
Fine, let's go for an even simpler metaphor/analogy:
You just spent five years of your life working on something, and you managed to invent the greatest widget known to man. Do you want to see that stolen?
Does that serve the same purpose to show why DRM would be desired, at least by developers and publishers? I haven't done an in-depth risk analysis to make sure that the metaphor/analogy is 100% accurate (I'll leave that to you :p).
Now, let's once again show a case of DRM gone too far.
You ,sell clothes. Everyone keeps yanking those tags off, so you put them in those hard plastic boxes that some stores use for video games (big plastic box that surrounds the game, store removes the game from the plastic box when you pay). That makes people feel angry, and actually lowers sales.
It is all a matter of a balancing act. Provide enough security to (hopefully) prevent piracy while not impacting sales.
And on a semi-related note: It never ceases to amaze me. If you were to believe half the people who complain about this stuff, pirates would know exactly how to find cracks with a -0% chance of viruses (which, in many cases, is true :p), but the poor honest customer who wants to crack his or her game is at massive risk of getting trojans and viruses (so obviously, it is the DRM prevents them from purchasing anything). Heh, I wish I lived in a world that black and white.

LOL . . . "We" didn't?? Nobody told "us" "we" didn't?? . . . =)

Heh.
Fine, I apologize Namor, if you felt that by saying "we" I meant "the entire universe'. It is sometimes difficult to remember that certain people are prominent enough that their opinion should hold greater weight. I meant no disrespect.
I am just remembering that the discussion basically ended with "Yeah, you guys are technically right. It is DRM. But who gives a crap? So shaddup!" and with neither side really complaining about the "100% DRM-Free" tagline, even if it isn't 100% accurate.

Agreed . . ; D