It’s a very, very different dynamic. There was free copying going on from the very beginnings of the game industry - PC games were being copied and going up on BBSes back in the days before the web even existed, and there was only the packaged good, no alternate revenue stream, no live experience to sell like film and music. All sorts of experiments with DRM were therefore also going on from the beginning (and mostly failing immediately). So there weren’t any sudden technological developments that hit sales the same way home taping was supposed to, or file sharing did for music or movies. Those issues were always there from the start with PC games, and no one can (convincingly) say, “These would be our sales if only ‘piracy’ didn’t exist!” Estimates of paying to non-paying players, where hard numbers were available, sometimes indicated that 90-sometime percent of the audience wasn’t paying, but since copying has always been part of the culture, how many “lost sales” they represented is impossible to say. To some degree the industry accepts it as normal (and developers inevitably were copying lots of games when they were younger and developing their interest). The popularity of the internet actually helped increase sales in some ways, as it allows the industry to design features into games that defy copying or reward sales - additional online play (via our servers) that add value to packaged games, games as services (everything from constant content updates, tying things into community features via Steam, running the game as online-only, etc.), downloadable content and micro-transactions, etc.
Also there’s console games, which being on closed systems, haven’t had the same copying issues (instead used games are the issue, there), so there have been these other platforms with greater sales potentials. Which is just as well, as production costs have increased exponentially for AAA games thanks to Moore’s Law, consumer expectations and the block-buster nature of sales, to Hollywood film levels. At the same time, audience sizes haven’t kept up, and retail prices have gone down in real-money terms, not having changed for 20+ years. So it’s almost impossible to release a AAA game without primarily targeting consoles (subscription-based games being the exception). That portion of the industry continues to be very hit-driven, with only the best-selling games making profits (though those profits continue to shrink with rising production costs), with a smaller and smaller number of games (and developers) reaping the rewards. So the industry has its own, quite serious dysfunctions unrelated to illegal copying.
Sales dynamics have always been different, too. In the earlier days, because of rapid technological obsolescence and limited shelf space, games had a very limited time time to make their money back - if your game wasn’t making money after a couple weeks, it likely never would. Back then a single hit would fund a number of losses, and that’s no longer true for larger games, but now there’s a longer tail for game sales that didn’t used to exist. Downloads and other online payments make up most of PC game revenue now (mostly tied into services like Steam), and are expected to be a bigger and bigger part of console revenue. Free-to-play games are the ultimate response to copying - give the game away entirely and charge for extras. It requires a very specific sort of game and a massive audience, but profits can wildly outstrip those of some of the blockbuster AAA games.
So the industry has always been in flux, with no real sense of stability, changing expectations, etc. but also constantly changing revenue streams, and being able to build revenue models around freely giving away the product, etc. in ways that Hollywood and the music industry can only dream about, despite not having their options for revenue from live experiences and broadcasts.
