Piracy of video games refers to the illegal copying and distribution of games. It is seen as a recurring problem in the video game industry.
Nintendo has traditionally taken drastic steps to fight piracy of their games. As early as the 1980's, the company experienced a high level of piracy for their Family Computer Disk System. This and their failure to successfully co-operate with hardware manufacturers like Sony and Phillips led to the company sticking with the harder to copy game cartridges over optical media until the 21st century. Even when Nintendo finally adopted optical media for the GameCube, the company chose to use smaller 8 cm discs, which sacrificed memory in order to be harder to copy.
With the rise of console constantly connected to the internet, Nintendo has changed their tactics. Instead of intentionally sabotaging their own game storage media, Nintendo has resorted to updating their consoles on a regular basis in order to block pirated games from being played. This has had only limited success for the Revolution, which eventually was unlocked by hackers, but has so far worked very well for the Game Boy 3DS and Stream, which have virtually no piracy as of April 2013.
Compared to Nintendo, Sega has taken a softer line against piracy. In many ways, this has helped the company. For example, their willingness to use the easily pirated CD-ROM for the Saturn allowed them to win the bulk of third party support during the fifth generation. However, Sega's use of optical media has meant that their consoles have experienced rampant piracy at points, particularly in countries where games were more expensive. Although Sega usually sells consoles at a profit, meaning that they could benefit from even a console that only played pirated games, this helped contribute to the companies' smaller profits than Nintendo's even when the company was selling more consoles.
In recent years, Sega has adopted the practice of updating their systems on a regular basis in order to fight piracy. Like with Nintendo, their success rate has been mixed, and many millions of Pluto games have been copied per year since the console's launch.
The battle against game piracy has arguably been the most fierce on Personal Computers, where in many cases, the number of pirated copies of games outnumbers the legally sold number of copies. Many companies have striven to fight piracy in a variety of ways, including DRM, copy protection, and limited installations. These measures have largely failed, due to the abilities of the pirating community.
In recent years, however, the number of legal transactions has increased compared to the number of illegal transactions. This has been due to the popularity of digital stores such as Valve's Steam, which routinely offer games at low prices and with extra features. As the financial incentive to pirate has decreased, many companies have found that they can release games with minimal protection and not be pirated an excessive amount.
Due to the "freemium" nature of many mobile games, as well as their relatively low costs, piracy of mobile games is the exception rather than the rule. However, there is a large pirating community on mobile devices, especially for the emulation of classic console and handheld games.
In general, any notable game system weaker than the Game Boy Nitro, including the fifth generation consoles, has been successfully emulated for mobile devices and have large numbers of ROM's available. Although many hardware manufacturers ban the use of emulators on their devices, they tend to be easy to "unlock" and adapt emulators to.
The main source of controversy in emulation on mobile devices is that many classic games being emulated are digitally sold on the consoles and Game Boy 3DS. Nintendo in particular has interests in reselling classic titles, sometimes as enhanced remakes. The company has taken legal action against some emulator developers in the past, but has thus far seen limited success.