And you can’t lose something you didn’t have in the first place. If anything you are gaining profits due to pirating.
Someone pirates a game they aren’t sure about buying; then they go and buy the game. However, had they not been able to play the game beforehand (you can’t rent PC games) they wouldn’t have bought the game.

It’s all about how you look at it. If you want to see that people that would have bought the game aren’t buying it because they can get it free, then yes, it looks like you’re losing profits. But if you want to see that people are buying the game that wouldn’t have previously, suddenly it looks like you gained profits.

The problem is with your argument is any one user can become mass producer. Thus creating an unauthorized sales channel that the content creator has to compete with but that competitor doesn’t charge a dime.

I respect all of the developers at Naughty Dog immensly, but I can’t say I aggree with this laissez faire attitude. Of course WoW has a low piracy rate, the game is free to play now. 😛 Very bad example for someone who is from the industry IMHO.

That being said lets assume WoW didn’t have Free to Play. Still than WoW is a completely online affair. It would require a very high level of expertise to “pirate” WoW. Much more so than a single player console game.