Whatever the excuse, piracy does hurt companies. It is silly to say "piracy is not theft". Bulk of game production budget goes into making a game, not manufacturing media.
In fact, making actual copies got even cheaper than several years ago. So, by your logic, game/music companies must have just fantastic profits.
Why? One label can't just "raise prices", because competing recording labels will profit from that. Prices usually stay at their "natural" level, if not taking into account other factors, like inflation.