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code.samurai said:
There are lots of examples of popular successful platforms that may have been helped by piracy Windows, PS1, PS2, Wii, DS.

I'd like you to prove this statement.  Just because a system is popular, doesn't mean it is because of piracy.  PS1 and PS2 were easy to pirate, but Wii and DS are not.  You have to buy a $30-40 adapter to pirate on the DS from a shady Chinese website.  I'd guess most consumers won't take this route.  Only hardcore gamers that need to have 10+ games/year or be able to play older games they love.  And to my knowledge the Wii has not yet pirated.  I thought the reverse spin system made it very cost prohibitive for pirates because you'd have to buy a special copyinfg drive for thousands of dollars. 

Why are people perfectly ok with buying used games, yet pirating is a horrid crime which people should suffer for? Neither gives the developer any more money (which is why DRM is being used to kill the used games market*).

The differences are the law is black and white.  The right of sale doctrine gives you the right to do whatever you want with purchased physical media including resale.  The copyright laws do not allow you to copy the product and give it to people for free.  You'd also have to look at the scope here.  One person putting a game on the internet, can get a game copied 10,000 times.  So the developer receives $50 for the 10,001 people that have used their product at a time.  In a used game, the original owner has to give up their right to play the game.  So at most for the $50 1 person a time is using it.  You also have to figure worst case scenario, a game is sold used once a month for the course of the life of the system (1 month due to shipping, sale time, etc.).  That means that over 5 years, 60 people at most will have played the game.