As a game developer, with 6 games in the appstore, we also had some exposure to this issue. Our first major game was a multiplayer pool game (Earl Strickland or Steve Davis) where matchmaking was provided by our own servers, nothing really sophisticated, it just acted as a relay. While i am not saying that one pirated copy is one lost sale, but the first couple hundred games played online was done using a pirated copy, and we haven't seen a single legitimate in the first 2-3 days after release. And there was a free demo... Technically, detecting a pirated copy is still very easy, the "cracking" just removes the entitlements from the plist, so we knew the device id, the only thing we had to do is just do something about it... The reason we choose to do nothing was the prospect of something going wrong for a legitimate user... After all sales were not that bad, one of our games made it to the UK top 10, but the company has folded by then. I guess that says pretty much about how much profit we made... In real life the story is a bit different from the one Apple tells you - your game will only sell well (10K units+) if it is featured, and you have to pay up for that... Do some calculations, do release a professional quality game, you need a coder or an artist for 2-3 months (if they are exceptional, and you are either one of them) or more if they are average, which (in the UK) will cost you like 2K GBP per month (cheap), ignore the cost of software, office space, etc... so you have make at least say 5K on your game. Assuming 1 GBP per game (70% stays with the developer), that makes perfectly clear how many units you have to sell to make it even. Good enough for the bedroom coder, but for a professional there is a lot more money to make elsewhere. That pretty much explains the average quality of games on the iPhone, IMHO.

Sometimes games can be movies in their own right. Either i became to old, or does anyone else remembers Wing Commander III and IV as well ?