That's an assertion I hear a lot, but is that true? How can you possibly prove it
If I buy a flash cart for the Switch, and put a pirated copy Mario Wonder on there, that's a loss of a potential sale. You could argue that I wouldn't have purchased it anyway, but you really have no way of knowing that.
2. Would-be consumers who are priced out or locked out
The first group is, if anything, only encouraged by attempts to stop them, and generally won't pay no matter what. The second group would pay, if it were possible and economical for them to do so.
Focusing on the second group, you can say that every pirated copy is a "lost sale" but the sale that you've "lost" would only happen on terms favorable to the consumer. In other words, supposing you sold a product for $50 in developed countries, you're not going to get the equivalent at any significant volume in developing countries. But if you were to cut the price to the local equivalent of say $10, you'll probably get lots of sales. Refusing to market-adjust your prices, or even more so, refusing to sell in a market altogether, is a great recipe for piracy. Yet estimating that piracy at top-shelf price times number of downloads is grossly unrealistic. The piracy cost you what you should have sold it for; but of course, if you had done that, you wouldn't have seen so much piracy.
There are some exceptions to this, of course. Certain categories of media are extra prone to piracy (adult/restricted content in particular) regardless of price. Piracy also happens because of factors the publisher can control besides price; for example, anti-piracy measures in some PC video games have gotten so onerous that pirates are getting a better quality product; Switch games (in)famously run a lot better on PC than the console they were actually designed for; Blu-rays are so chock full of dated advertisements and anti-piracy warnings that can't be skipped that a torrented MKV is preferable; etc.
Again though, these are just kind of assertions. I am sure what you’re suggesting is mostly right, but I would actually like data instead of just going off gut feelings.
I think there is a group 3 that people ignore: people who could absolutely afford the product but pirate it anyway because they don’t want to pay for it. I don’t know the numbers, I don’t even think it’s the majority, but I also don’t think it’s zero either.
I've followed indie devs talking about this stuff, and I've been a critical consumer of digital media for decades. That's all fairly anecdotal, to be fair, but I am not aware of any hard data that's public and transparently sourced.
The segment you talk about exists, indeed I've seen it in action, but chasing them down has rapidly diminishing returns. Their loyalty to the product is just as shallow as their loyalty to the author, and they'll just scamper to other media they can get easily if cornered. Indeed, that is actually a fairly good argument for some mitigating measures: it's like a lock on your house, it only stops you from being the lowest-hanging fruit, but that often goes a long way.
I think I pretty much agree with everything you said here. I think just taking extremely minimal precautions would deter like 90+% of piracy for people who are doing it for the "I just don't want to pay for it" crowd. Just like locking a door doesn't stop someone who really wants to get into my house, it'll still stop a vast majority of cases people trying to get in; most people aren't going to break down the door, or bust open a window, or get a bulldozer to go through my wall etc.
That's why I was more or less on board with IA doing Controlled Digital Lending. Obviously if someone really wants to break the DRM and distribute the media, they're going to do it, but I think that for most people any amount of effort will be too much, and they'll abide by the rules as a result.
I think the National Emergency Library was a huge mistake, because it basically removed those minimal restrictions, making themselves a giant target. It was certainly well-intentioned but it made a lawsuit almost inevitable.
If I buy a flash cart for the Switch, and put a pirated copy Mario Wonder on there, that's a loss of a potential sale. You could argue that I wouldn't have purchased it anyway, but you really have no way of knowing that.