It most certainly hurts more than the second hand market. Lets look at both scenarios in a grander scheme. In scenario A Nintendo has sold at least 2 DSes and 4 games. In scenario B even if they had sold both Dses they have sold 0 games. The second hand market can only exist if people are buying the games. You have to have so many copies out there for them to be sold after someone else bought them. With piracy you need to sell one copy of the game and it can be redistrubeted infinitely. Second hand market still ensures a somewhat healthy number of games being sold while piracy just means you sell a copy unless the game data gets leaked.

As FaithRaven said, they are aware that there will be piracy, but they want to make sure to keep the amount down somewhat. As for the people talking about the second-hand market, it is true that there would be plenty bought that way, but I've known several people who pirate, and if they weren't able to pirate, they probably still wouldn't be able to hold off buying some games when they first come out.

Also, as others have said, when things sell in the second-hand market, it still removes that object from the stores. When the stores run out of the used copies, at least some of those people may buy a new one. Additionally, if they sell through the used and new copies, they will then have to try to order or get more copies (providing it is a game still in production). Sometimes for legacy systems, it is a bit more acceptable, but plenty of people pirate current systems.

The big problem is not someone downloading a game illegally. it is someone downloading a game making 5000 copies and selling it. There is a correlation between second hand sales and first hand sales (As Ginzmo Illustrated).

The best way to combat commercial and non-commercial piracy, as well as lost profit from second-hand games and renting, is lowering prices - it's that simple.

I buy most my games new. But I also buy second hand, trade/rent/borrow games, and even try some ROMs (where possible). And honestly, after spending the many hundreds of euros on gaming I do every year, I don't feel guilty at all. If anything this makes them (Nintendo in particular) extra profit, cause those games I don't buy are the ones I wouldn't buy anyway (unless they cost half as much as they do). And in the end, I actually buy some of those if they're really worth it.

My brother illegally has something for the DS which has 37 games on it.

I think your brother legally has something with 37 illegal games. If he illegally has games, he stole them (so he is a thief). However if (legally) he possesses illegal games then he is a pirate. Normally I would not point this out, but my son took my DS and I don't have much else to do.

Real gamer only buy original comsole/games. I'm from Malaysia. Here peoples like pirate games because it's very cheap:
Example: PS2 games ori = $25- $40 pirate = $2
X360 games ori = $45 - $60 pirate = $4
Wii games ori = $30 - $40 pirate = $3
PS3 games = ori =$55 - $75 pirate = no

I only buy original games.