Most products that are pirated are items where the cost associated with making an additional item is (essentially) $0 and can be readily done by anyone with little skill or equipment. The only way to truely eliminate piracy is to offer a product at a price where it isn't worth people's time to try to get it from an "illegal" source.
The problem is that far too many companies have built up the belief that since people were willing to pay a certain ammount for a product when there was little choice but to pay that price that they're willing to continue paying that price when they have the option to get the same product (essentially) for free. For example, if the music industry charged $0.25 per song or $2.50 for an album they would probably make more money because more people would be buying music and everyone would be buying more albums, but they continue to charge $1.00 per song because thats what they could get away with when CD was popular.
At least with the game industry there is some awareness that digital distribution is probably going to be the future of the industry, but there is an unfortunate habit of companies pocketing the savings from manufacturing, distribution and cutting out retailers when they should be passing these savings onto their customers. Hypothetically speaking, if "Next Generation" consoles were fully digital distribution and companies sold their new release games at $20 and older games at $10 the elimination of used game sales, renting of games, piracy, and the increase in sales from people buying more games would result in higher revenues in spite of having a lower price on the game.
