Nah, I still can't afford both in one night. ;)
I think that another reason for people downloading instead of buying games these days is the sheer amount of the bloody things being released each month. I mean I remember when I used to be happy buying three games in one year, mainly because that was how many truly great games would be released in that time period.
A couple of months don't go past now without some industry engineered show-down between two or three 'Best Games You Will Ever Play". Now, being older and debatably wiser, I just ignore the hype and continue to play whatever oldie grabs my interest. Little Jimmie, however, looks at his £50 and wonders how to make it stretch to £150 so he can join his mates online. Then, maybe, he makes a decision that isn't so honest...
Generous playable demos would perhaps solve Jimmie's dilemma, but wouldn't fill the pockets of Mr. Publisher.

Again, that is assuming a VERY big assumption: That people are going to spend money no matter what.
And while I haven't seen the study you are mentioning in particular, all the ones i have seen are more about substituting one good for another (well, entertainment source, in this case). Ie. if you don't buy music, you'll buy a book. So while the entertainment industry gets the same amount of dollars, that doesn't help the companies.
Also, the early sales are probably the most important. That is what determines if we get a sequel or not (in most cases) and if that dev team gets to stick around or not.
VTM: Bloodlines is probably one of the better selling games of all time (when you factor in the entire lifecycle :p), but it didn't help Troika when it had rather low initial sales. :p

No one should be surprised that various publisher organizations are putting out bullshit statistics on piracy; this has been a pretty well known fact for quite a while. What's shocking is that someone in government, and the US government at that, was actually willing to call them on the bullshit. Seems like either someone forgot to pay their bri... er, campaign contributions... or someone higher up forgot to stack the GAO with industry shills.

When people look at my game boxes or hear me talking about GOG or Steam they go: "You actually BUY games?" The same happens with music.
Maybe you guys in Europe and in the States are more honest about your dealings, but when it comes to several countries that aren't exactly the richest or the more culturally enlightened, piracy is rampant and is far, FAR more frequent than the honest buyer who pirates a game sometimes to use it as a demo and then buys it if he likes it. Over here, there's very little guilt mentality regarding the game maker's survivability, thinking these companies are rich anyway and they won't lose much if you pirate a copy for you and your friends. Over here, piracy is the status quo and people selling music CD's on the streets are as common as teenagers downloading games from torrent sites without anyone really caring about it. No teenager here is going to spend their little money on something he can get for free, be it a good game or a crappy one, unless he has good morals and a wallet to back it up.
So I DO believe piracy is terrible for business but I also believe none of the methods they are using to try and stop it is working and they are hurting their customers instead of the pirates. I also believe that you can't really gauge how much money they lose to piracy since knowing what are "lost sales" and what are "sales you were never going to get anyway" is nearly impossible. What I don't believe in is that "honest pirates" who torrent a game and then buy it if they like it is somehow a majority over the other kind.

But thats the trouble. There are countries where sales of DVD's, Music and Games are simply written off. They are expected to sell 0. The publishers only release them there to gain exposure and get the odd sale. What this US backed rubbish and the recent furore in the UK is highlighting is it's the people who DO buy games that are made to suffer. Only people who buy DVD's have to sit through those stupid FACT adverts that tell us downloading is the same as stealing a car or a handbag. Only people who buy games have to put up with limited activations and invasive DRM. The entertainment industry has made our governments believe that they can't make any money and jobs are being lost because everyone with a net connection is A FILTHY STEALING PIRATE.
I have a lot of sympathy for people who live in countries that support or turn a blind eye to piracy as they often cant buy the game legally even if they want to. The problem is political and it's up to the publishers to sort it out with local government. What I am sick of is being treated like a criminal by my own ISP simply because I want internet access.

You know what is fun?
Killing them dam good for nothing paladins.
what can be great fun is...
You know that human who piss you off by trying to ruin your evil plans?
Turns out he had a kid.
You spy on the kid and make sure they have a great life.
then after they grow in to a full size human...
you plan for one day that would be the best day of there life.
It would of been if i didn't show up.
That is when you show up in town with your undead minions.
Then one by one kill everyone they know and care about.
then you turn to them. In there eyes will be true fear.
If they ask why why did you do this?Say for fun. then kill them.

LOL . . . you always keep me laughing. I look forward to your posts as they are so original and consistent. BTW, I have been using this photo of you in several posts relating to necromancers, hope you don't mind.. . =)

Oh, You cut the horns.. Xee.., i mean Uruk looses some of his undead sex appeal then..;(
['least i think it's Lord Xeen]

Yeah, only had his avatar to work with, I will try to find a better image . . .=)
Edit: Fixed

Really bad example. Troika was already circling the bowl long before VTMB was released. Even if it did have awesome initial sales, it wouldn't have mattered. As the developer and not the publisher, Troika had already been paid for their work on the game, in full. They had already burned through that money and were unable to secure additional funding for any other projects. It was only after that that VTMB was released to poor initial sales and Troika closed its doors, but even if VTMB was a blockbuster seller, Troika still would have closed. Besides, the initial success or failure of a game really means nothing in regards to the continuation of a dev studio these days. Just look at what Activision has done to Neversoft, Red Octane and Infinity Ward over the last year or so. Between the Guitar Hero and CoD franchises, those studios are responsible for some of Acti's most successful games, yet IW is the only one that still exists in any capacity and it is currently bleeding talent.
The point is, high initial sales really only matter as a bullet point on quarterly reports to shareholders, beyond that, they are really meaningless. Since shareholders are the only thing that matters to companies like Acti these days, that's why DRM has been getting progressively worse; attempting to prevent the all-important "zero day piracy" so that those initial sales numbers will look better. Never mind the fact that the scenarios that Red_Avatar presents can and will actually improve the overall sales of a particular game (assuming it is actually a good game), which in the long run is far more important for business than a good opening day.

We shall hunt you down, holy light shall set free the the tortured souls within your minions, righteous blows shall decimate your undead constructs, and finally you shall be smited, never again to plague humanity.

The only solution to piracy is...
THIS

Hahahahhahha

Many have try paladin many have try. all have failed. What hope do you have?
it would be just like a paladin to think they could end my evil.
undeadminion7789:the scrying is done master. we know were the paladin city is.
me:Good.minion
undeadminion7789: yes master?
me:Send word to that goblin.what was his name again.
undeadminion7789:no idea sir.
undeadminion6065:you mean the one that all ways wear a green cape?
me:yes that the one green cape.send word to the green cape to ready his army.
undeadminion7789:Yes master.
[hours later]
goblinmessager:a letter for you my lord.
goblincleric:A letter? give it here.
[letter is handed over to the goblincleric]
goblinmessager:what does it say my lord?
goblincleric:sign he got my name wrong again.
goblincleric:send word to the army. tell them to be ready to march by nightfall
goblinmessager:Right away my lord.
unknowgoblin:is that wise brother?aiding this lich
goblincleric:Don't you remember what the paladins did to are village all them years ago?
goblinbrother:yes i do.
goblincleric:maybe i should remind you how the paladins came in to are village and slayed any goblin who didn't escape. all of them.they kill them all brother.
all in the name of good and light.With the help of this lich, there city will fall to us and be a new goblin state.a place of hope for all goblins.a place were all goblins can get a say in what happens.
goblinbrother:... orders my lord?
goblincleric:Go check on the army and make sure there ready .
goblinbrother:right away my lord
[goblinbrother leaves the room]
Goblincleric: Paladins you will all pay for all the countless goblin lives you have taken.
[2 days later]
.
undeadminion4354:The goblins army is here master
me:Good.it should take us about a week to that paladin city.dam what was the name again? any way... make sure we have everything we need to lay siege to the paladin city.
undeadminion4354:Right away master.