I just read yet another person say something along the lines of “there will always be piracy, it’s inevitable”. This line of thought bugs me. No, it’s not inevitable. It’s the best we can do right now for a variety of mostly non-technical reasons but it’s not that hard to come up with some rough proof-sketches that piracy can be 100% avoided, technically.
At the extreme you could have built in signature verification on the CPU itself so it will simply refuse to load any code that isn’t cryptographically signed for that chip and that chip alone, then distribute executables as DLC, with per-customer signatures.
Will this work? Well, the world’s armed forces somehow manages to communicate securely with themselves and another, with very high incentives to breach each others communications. That should be enough to tell you that if we really wanted to, we could make sure you and only you see what we (and only we) want you to see.
Another simple existence proof is something like OnLive. If you released a game only on a streaming service so that customers never even have any code running on their machine then it’s obviously impossible for them to pirate it (assuming you maintain security of the main servers which do have the code).
Piracy is inevitable with the current business model, but in a future with digital distribution only (at least for the executable), this is totally a solvable problem, and there’s pretty strong incentives to get it done too.
Not to mention the fact that both the PS3 and to a lesser extent the 360 had a pretty good run of being piracy free. The number of security holes is finite, so eventually you’d expect to be able to plug all of them, and get zero piracy even with the current business model.