more thoughts:

there's 2 parts to piracy

1. cracking DRM

2. illegal re-distribution of non-DRM protected software - either software that has no DRM to begin with (such as Only if) or has been cracked (like Caveman v1.3) .

there exists in the world an engineering hobby / discipline called "cracking". its about reverse-engineering and modifying games. the payoff for crackers is posting their work so the world can see how awesome they are.

if you eliminate the payoff for crackers, you don't get cracked.

so open source, free games etc don't get cracked,

ALSO - limited DEMOs that don't include the full game don't get cracked!

the recurring theme here is "there's nothing to crack - no glory".

prior to Caveman v1.3, i only used limited demos, and keydisk DRM. these was nothing to crack in the online demos, and the keydisk meant any upload was no good, and no cracker will buy a game to crack it, as there are too may free games to play around with. so i was safe.

I didn't become a target for piracy until i went to a demo that could be cracked to turn it into the full game.

so then they had something to crack - a challenge!

so once your DRM is removed by cracking, then they post the results to get their profs from their peers (other crackers).

now comes into play the second part of piracy: illegal re-distribution of non-drm protected software.

basically you'll have two types of folks who will download a cracked game:

1. folks who know its a cracked game. they may want to try it but there's no playable demo. they may not be able to afford it in the first place - so they're not a potential customer anyway.

2. folks who don't know its cracked. they just think its a cool game and have no idea they are receiving ":stolen" goods. these are lost sales.

at the end of the day, if someone likes the game, they will buy it (if they can afford it), but first they must realize its not free, and second its very difficult to sell something to someone who already has one (such as a full (cracked) version of your game on their hard drive). so don't rely on potential customers playing cracked versions, then buying the legit version as "the right thing to do".

when implementing anti-crack technology, as mentioned above, how you respond to detected cracking can leave the impression that your game is buggy. especially if the player doesn't know its cracked. of course, by then its too late, cause you've already been cracked.

in the end it becomes an arms race. you release with drm, they crack it. you release with new drm, and new features to give the users a reason to buy the new version vs DL'ing the cracked current version. then they crack the new version, and the cycle begins again. the idea with this approach is your drm should hold up long enough for you to get a new version ready. this approach is very common with small business app devs.

the only real solution is "nothing to crack - thus no glory - on to the next game"

limited demos, free games, DRM on full version to prevent customers from simply posting it, "ET phone home" (server side authentication of users), streaming code from servers - all these approaches leave nothing to crack, or prevent/deter illegal re-distribution of unprotected code.

a limited playable demo and some simple DRM on full versions sold is probably the best approach these days.

remember its all about the glory - take away their [the cracker's] chance at glory, and you (and more importantly - your game) no longer exist in their universe.

FYI one of the entries in one of my dev journals here has a lot of info on DRM and anti-crack technology

http://www.gamedev.net/blog/1729/entry-2258666-anti-crack-info/

http://www.gamedev.net/blog/1729/entry-2258667-gamedev-tycoon-vs-crackers/

You can't stop the pirates, period. You can slow them down, perhaps, but any measures you employ in this way will also potentially block and irritate your legitimate customers. It's my opinion that you should simply not waste brain power worrying about locking pirates out of your single-player campaign. A better strategy, if it fits, is to have a compelling online component (whether its required or optional is a separate choice, but for me it needs to be optional in the sense that I must be able to play single-player portions of the game without a network connection.) this could be co-op or pvp gameplay, or it could be highscore/social compoenents, or even something like facebook integration -- basically any carrot to entice the user to want to connect online -- and then you verify that they are legit, which encourages them to pay up. This also prevents you from incurring any service expenses on behalf of pirates (you'll only provide network services to paying customers)

Its also generally a mistake to think that every time someone has downloaded your game illegally that it equates to a lost sale, so view piracy stats with a huge grain of salt. I saw a study once which suggested that something like 3 percent of pirated copies represented actual lost sales (people that would buy the game if they had no option to pirate it). The same study suggested that most piracy represents a sort of unfettered trail-version for many pirates -- they'll pirate a game simply to try it, they may not even play it more than a couple times. Only very rarely are pirates actually enjoying the fruits of your labor Scot free for long periods of time.

TL;DR: You cannot really reduce piracy, you can only increase paying customers. The best way to do that is to provide the most compelling experience you can, while strongly incentivising them to pony up some bills. Don't worry about the revenue you've 'lost', build the revenue you can. You'll see a higher return on converting customers (including former pirates) than you will on thwarting the die-hard pirates.

You can't stop the pirates, period. You can slow them down, perhaps, but any measures you employ in this way will also potentially block and irritate your legitimate customers.

Good luck if they discover the ruse though, expect dick pics in all the email accounts you ever had.