In Japan, among my non-game industry friends, I’d say about 90% are using the R4 piracy device for their DS to steal all their games. These are people who are a typical average consumer, perhaps buying one game title every one or two months. Not the type of people you would expect to see pirating but here they are.
On an international flight from Tokyo to San Francisco I witnessed a four year old girl playing the DS version of Mario 64. Nothing particularly out of the ordinary there until I saw her change the game she was playing to something new. Not by changing cartridges but instead by firing up the menu for her R4 that was loaded with games. Clearly a parent set this up but it was still a bit of a shock.
Now Ubisoft have just announced that their DS sales for the year are down 67% and blamed that in large part on DS ROM piracy.
Surely, it is more convenient to have many games on a single cartridge and the R4 (and its friends) does provide that. In this day and age this can be fixed easily with local storage on the device. The new DSi model is starting to address this. Nintendo is always slow with these things but they would likely satisfy the customer’s desire for convenience by moving to a fully downloadable game model with no cartridges, where many games could be stored on the system at one time and be purchased directly from the device.
Nintendo must do something to secure their system better. High levels of piracy directly leads to less financial incentives for developers to build for that platform and thus dropping revenues for Nintendo themselves. Not just directly by having their own games pirated but also because third parties no longer look to release software on their system.