Heh, it really is that simple. Many current software business models are just not sustainable. I really have no pity for companies losing money to piracy. We have companies releasing free products and are making major bank on it. Lets all just think about farmville for a moment and then all vomit in our mouths. And it's not just the immoral, possibly criminal developers like Zynga. Tons of companies are making bank on free to play. Thats Korea's entire MMO market. Play for free, pay for stuff!
Valve has also shown how to make money off the 'traditional' payment model. Featurized DRM that feels logical instead of arbitrary. Matchmaking and friend services. Access to sales that grabs consumer surplus. Companies like Ubisoft see steam and try and imitate it but only copy what benefits them. Thats not how you make reoccurring customers. You gotta be good to the consumer -- not because you're a nice guy, but because it makes money. Google supplies tons of free applications and service -- not because they are the sweetest, cutest guys in the world, but because they designed a business model from the start that would profit from being good to the consumer.
Granted you still don't need to be good to the consumer. Console secondary sales are being fucked with by all those free DLC offers. It's not nice, but at least it's smart. I just can't feel bad for people who use a dated distribution model and then complains that they aren't making ALL OF THE MONEY. You're doing it wrong, get over it.