They have. It's called "Xbox".

I had a big response to this written out the other day, but didn't end up posting it (was writing it at work and got distracted). I might repeat some of what others have said by now, but I'll try and reiterate what I was going to say:

• Implementation of systems like HDCP require effort from all parties involved. For a system like the PC which has for a long time been open and any efforts to close it off are going to be met with significant resistance to the point where the effort isn't worth it. Even if everyone agreed to do so, all it takes is a poor implementation on a single piece of hardware (or software) and everything is compromised.
• Systems like HDCP are inherently flawed. You cannot develop a system where both the content and the key are given to the person you are trying to keep out (just like all DRM) and expect it to work.
• Implementing protection into the video card isn't going to help when the executable is accessable and can be easily reverse engineered.
• HDCP is a good example of why this wouldn't work anyway. HD movie piracy from Blu-ray/HD-DVD sources occurs before HDCP even comes into play (see previous point).
• Consoles (aka "closed systems") aren't immune from piracy. They might have lower piracy levels, but I have not seen any figures indicating if this is true or not.
• It only takes 1 person to go through the hassle of getting past the copy protection before its all over. Systems like this have consistantly shown to not stop piracy but annoy the legit buyers who end up with quirks in the system.
• I'm not convinced that piracy is the cause of PC gamings "decline". I think various factors including MMOs (more on this in a second), consoles being easier and perceived as more social, and general costs of PC gaming (especially for keeping up to date with the latest games) are just as likely to be notable factors.
• As to the point on MMOs. In 2008, the PC gaming industry was valued at $11 billion (up from $10.7 billion in 2007). WoW alone accounted for over $1 billion of this number, with thier 11.5+ Million subscribers. To put this into perspective, there more people who play a single PC game than 1/2 of the entire PS3 install base. Many (most?) of these people, who would have purchased numerous PC games during the year, are now buying few to none. While I don't have any figures on hand, one I heard about 12 months ago was there was approximately 35 million MMO players world wide. I don't know how many PC gamers there actually are, but if we assume the market is a similar size to say 50% (random number) of the console market, this is potentially 50% of PC gamers now tied with with MMOs and no longer making purchases of other games.
• Piracy is a social problem*, not a technical one. A social problem requires a social solutions and no amount of technical barriers are going to stop it without compromising the product being sold.

*As a software developer, I don't see piracy as the real problem. The real problem is companies with a business model of trying to sell a product of infinite supply as a supply restricted product in a market where everyone has readily available access to duplication tools. This isn't to say I'm against copyright completely, but there needs to be an overhaul in both laws and business models to bring them up to speed with technology and social norms.

1. The only party which could make the response would be Microsoft because they control the Directx standard and they could if they wanted to potentially force AMD/Nvidia to make the concessions they need. Noone else is in a position to act. I see that there is potentially resistance but if theres a sufficient carrot, say having fewer DRM problems and not having to deal with Securom it may fly with a lot of legitimate buyers.

2. HDCP isn't designed to prevent people from aquiring the content at all, its designed to prevent casual piracy of content. It doesn't have to be fool proof, just casual proof.

3. If a private key is held on the hardware itself it would be much more difficult to aquire than a software implementation. Also if the key doesn't match you can't simply get around the problem by taking away the question for the key, if say key codepaths on the GPU were unavailable the game would still work but the pirate would not have access to say Direct3d 11 features. The card would declare itself as say a Directx 10 compatible card.

4. They are immune to most casual piracy, you can't just stick in a special burnt disc you have to modify the console hardware itself.

5. So long as its not easy to replicate it doesn't matter so much if someone does it. Linux is a perfect example, its free but because the software is difficult for a lot of people to understand its adoption rate remains small.

6. MMOs are big, yes I agree

7. Yeah MMOs are kinda big, and they fall on the paying side of the equation with people buying subscriptions. It may only be a fraction of the PC gaming population but it may be significantly a large part of the PC gaming market.

8.Piracy is a social problem, but I like to think that a carrot/stick approach works better as both an incentive to not pirate and a disincetive to piracy. The problem with piracy response is that you can easily cut out your main markets and your casual markets by say cutting down on retail release etc.

1. I'm still uncertain how DX would implement such a thing sucessfully. You have something which is mostly handled in software, including most of the video cards functions (the drivers are where most of the intelligence for a video card exists). Assuming lets say that the software is somehow encrypted and the videocard decrypts it, the decrypted executable still needs to be accessable to the processor and must be stored in general RAM, where it can be intercepted.

2, 4. Current technologies stop casual piracy. Usually, a lot of legwork needs to be done by the hackers before the game can be easily pirated (either modchips or cracks). From my personal experience, I'm not convinced that getting modchip installed is that big an issue, though here in Australia modchips are legal so there isn't any hassle in finding someone to do it.

3. I'm not entirely sure how your proposed system works? I assume the software sends the video card a key, and it needs to be matched up or something like that? What is stopping me from implementing something to just fake a correct key (which would need to be in the software  and easily extracted)? As an example, while I'm not 100% certain on how the DRM in steam works, we have a situation where the game needs to communicate with an "unaccessable" server to authenticate, yet all games released on steam still have pirated versions.

5. My point about replication is it only takes 1 person to remove the difficuties of replicating it and all bets are off. This comes back to detering casual piracy, yes, but the modern pirate just looks for the torrent on the tracker and downloads it these days, whether it be a console or pc game.

6, 7. My point about MMOs is that there are a significant number of people no longer purchasing pc games because they are spending their money elsewhere (subscriptions). Your original post seemed to be directed at the single/non-online player experience, so while MMO players are still supporting the industry, they aren't supporting the parts of the industry which people percieve to be dying.

I never knew that.  Do you have a link to an article about that?  I believe you but I can't find anything about it.

But if they stop PC piracy. There killing off the majority of PC gamers and owners.

As well most Vgchartz users here from pirate land (Switzerland) will protest. ''MY COMPUTER! MY CHOICE!""

who is tim?

Well maybe you shouldn't care about what your friends think and peer pressure ?

In Denmark piracy isn't that bad.

I buy all of my games.