Originally Posted by Creslin321
But what happens is that one person buys the game, and then posts it on a popular site where everyone else downloads it for free. Everyone is playing Jim's game, but Jim is still destitute...despite having worked so hard to make his game.
Er no, that's not how things play out in Real Life. Instead:
  1. A portion of those who download, play the game, don't like it and decide not to buy. Theoretically a lost sale, but without the download they likely would not have bought due to reviews.
  2. Another portion like the game and buy it - a sale won and without advertising cost for Jim.
  3. Some will download and never get round to playing it - so neither a gain nor loss.
  4. Finally we have those who would have bought, but decided to download - whether to save money, avoid the hassle of purchase or because they were put off by registration/DRM.
It is only the last category that can be described as a genuine loss for Jim, and could easily be matched or exceeded by the sales won from category 2.

And to hear how a real-life Jim (or rather Jeff) deals with piracy, see:

The Final Answer For What To Do To Prevent Piracy
Sometimes It's OK To Steal My Games