I think the long-term answer to piracy though is to make games free and make money through advertising. A lot of popular free Flash games make hundreds of thousands of dollars for their creators through advertising. I just hope Flash improves enough that games like Aquaria will one day be possible to make in it.
A modern, avarage video game has the budget offfffff... a couple million dollars. I think.
Advertising won't do it. Making video games is very expensive, about as expensive as a cheaper Hollywood budget. A decade ago, one could make a game from scratch (engine and tools and everything) and have a roomful of staff to be enough for the job. Nowadays, you can't.
3D made video games very expensive, especially with all the new, fancy and shiny graphic features that you have little use of.
Small or more simple games like Aquaria is a great exception and shows that simple, low-tech games can still be modern and great. It's just not the commonly held belief among publishers, and sadly, gamers.
As for Flash, I am no Flash Master, but I do think that it has its limitations and problems.
His idea isn't that bad, free games filled with advertising (if it fit in the world/was tasteful, or if you had a commercial interruption like television shows...
I mean, there's a lot of made for TV movies that NBC makes (for example) on one of their sister channels like Sci-Fi. Take the recent Tin-Man as an example. Games could reach taht point if their popularity continues to climb. If games were free to download (avoiding the cost of publication and distribution), and had tasteful ads on billboards in the game or commercials during loadtimes or even 2 minutes of commercials every 20 minutes or when you went through a loadscreen/menu (pausing the action in the middle would be bad unless itwas already paused).
Not many games can go the route of ads in game that woudln't be disruptive though. Sports games would have no issue, and games like Hellgate London wouldn't bat an eye at putting up mountain dew or taco bell ads on the billboards and ad spaces in the world. Anarchy Online is an MMO that gets away with it too because it's got places in the world that had virtual ads anyway. Now they just play 7-11, Mountain Dew, Simpsons whatever...very unobtrusive. Of course you cna choose to pay and not get that.
Maybe a program where you say you'll participate in market research for companies for X amount of hours to be able to play the game for free. Or your commercial viewing would be limited ot 6 months or something (set amount of minutes viewing commercials) to pay for your product. It's quite feasiable in many games.
But for a game like Aquaria, real-world ads would really disrupt the flavor of the world, and the only opportunity to interrupt would be at start of the game, and during loadtimes between stages (maybe 30 seconds of commercial gauranteed, while it loads in the background). The question would be, do the creative minds behind the game want ot have that sort of interruption in their game. It would be gauranteed money for them from the advertising company so that would be good. But it would compromise the creativity a bit.