The retailer then gets a smaller audience to sell to, if people know they can get it for free it make it a lot harder for retailers to sell the game, heck they might not even sell it, at the end of the day it is stealing, you have a developers product and you havnt paid for it
Just in case you missed some other guy's answer to this, I regret to inform you that not even nearly all pirates would have bought the game, not at a high price at the very least. Personally when I pirate a game, it's because the interest/price ratio isn't just quite good enough yet. That said, I've so little time and interest in most games these days that I don't even pirate that much. The last two games I pirated (I think ) were because I can't find them anywhere - literally (well, that and the fact that I'm not paying 40€ for a digital copy of a half-a-decade old game I don't even know I'm going to like without first trying it).