vAddicatedGamer: So, you're not actually losing anything, are you? Say, if they don't get the pirated copies, they probably still won't buy it. ... If they don't get to pirate the game, they probably won't play it, nor would they buy it. So in this case, the "speculated" losses are rather fictitious.
Correct. That's exactly the point I was making in my post. While the company is losing out on potential revenue, the fact is that the majority of software pirates would NEVER have bought the software anyway. If they were somehow unable to get hold of a bootleg copy, they still wouldn't pony up real money for it. So the CEOs who are cursing and ranting about the "thieving pirates" stealing their goods isn't exactly true. I readily acknowledge that point and want more software companies, especially gaming companies, to realise that.
vAddicatedGamer: But I think some might try out a pirated version as a demo of sorts. If they like it enough, they will buy it in support of the developers.
Combining the two, you don't actually incur serious losses from someone pirating your games. Contrary to that, it acts indirectly as a marketing tool to expand the market and reach out to potential customers.
Here's where we disagree on. While some people may decide to buy the real version of the game after having played the pirated version, this will be only be a tiny, TINY portion. How many people do you actually know (as in, know in real life) who voluntarily buys the genuine product after having completed a pirated version of the game? Even I will freely admit that if I had a fully working product that I got for free, and the developers will never know I have it, my motivation to actually put down money for it after the fact will be close to nil. More likely, the pirates will simply go, "Cool, that was an AWESOME game," then start downloading the torrent for the next big hit game to come out that month.
Again, this wouldn't really be an issue in itself because these people wouldn't have bought your game anyway, but the danger here is that it eventually creates a pervasive attitude of "why buy the game when you can just get it for free with no repercussions"? When I was still a teenager, I actually had friends who laughed at me and called me stupid for buying games when they just got all theirs free from various underground forums and warez sites.
If software companies don't take steps to combat this opinion and continue to encourage people to do the right thing, eventually people WILL start to believe their friends and stop buying the games. It's hard to keep doing the right thing when you see your friends constantly getting away with doing the wrong things. And if enough of your paying customers start turning to the "dark side", so to speak, then eventually your profits disappear and you either have to start cutting corners, laying off staff and turning out poorer-quality products, or you go under. No more games for anyone.
If trying to achieve a wider reach is the outcome, then it could be accomplished (as I said in my original post) by better community outreach, more interaction between the developers and fans, and the release of a proper demo. (And by that, I mean one that actually gives the player a good idea of what to expect from the game, and not simply a bunch of cutscenes and one combat.) There is no real reason for somebody to download and play through the entire game before deciding whether or not to buy it; that would be like somebody demanding that they get to watch the entire movie to make sure they like it before they buy a ticket to the theatre.