So yea... apparently Gas Powered Games and Stardock released a game without any DRM at all called Demigod. Unfortunately, it was pirated quite extensively and a quirk in the game's multiplayer mechanic led to all the pirated copies flooding the Stardock servers, leading to a release week with a game being virtually unplayable online. They've since patched it and fixed the issues, but obviously this is a pretty huge blow for Stardock, which has a good policy of not using any DRM on their games.
I think there are several problems with PC games and piracy right now. Not gonna go into the whole issue of torrents and the availability of warez since that's quite obvious...
First of all, many games now don't release demos beforehand for their games. That's just shooting yourself in the foot, as far as I'm concerned. With the rather draconian return policies for PC games nowadays, you can't really return anything that's been opened. Demos are needed for people to find out if their computer can run the damn thing. And of course, they're also great for helping gamers decide if the product itself is worth buying. 50 bucks is a lot to just spend on a gut feeling. If demos aren't available and people are stuck on the fence about a game, it's easy to be tempted by piracy.
GPG and Stardock had a pretty high hill to climb in order to sell this game to the consumers. First, they had to convince all the DotA fans if this 40 dollar commercial product was a worthy successor to their free Warcraft 3 mod. That's not gonna be easy. Then they had to convince all the other gamers who had never even heard of DotA that this was a fun experience. People don't just spend 40 dollars on a new IP based on some weird Warcraft 3 mod, with cover art that looks like some sort of Supreme Commander clone. They're gonna save their money, especially in this economy, for something familiar and reliable, something they know will be quality. That's gonna be something by either Blizzard, or Valve, or Relic. Not something quirky and new. They needed a demo, at the very least.
Now, the fact that it's a primarily multiplayer game should've led to higher sales. Games with multiplayer are inevitably seen as a better value and more gamers are willing to pay for a game that contains a good singleplayer component as well as multiplayer. You get more mileage for your buck, it's as simple as that. Whereas with some games that just contain a 6-8 hour singleplayer campaign with little replay value, it's harder to justify a 50 dollar purchase. That's about 7 dollars per hour. Prince of Persia and Mirror's Edge come to mind as examples. Don't get me wrong, I enjoyed both of those titles a lot as well-crafted experiences, but they were clearly a lot shorter then something like Dawn of War 2, which can last you about 15 hours for singleplayer and a few months or even years in multiplayer. I think in the future, there should probably be more of a variable pricing scheme for publishers. 30-40 dollars or so for games with quick singleplayer experiences, while the big titles with multiplayer like Call of Duty and so on go with 60 dollar price points. I mean, can you imagine how many more people would've actually given PoP and Mirror's Edge a try if they were priced at 30 dollars rather then the actual 50? Those were great innovative titles, but again the short playtime just didn't make it worthwhile for most.