Digital media really doesn't work well with our traditional form of supply and demand because of infinite supply
Let's take a look at traditional copyright. It was created to protect writers, musicians, artist etc. from having their work stolen by big publishing companies that used your work for profit. You performed your song on stage, people payed you to listen... and then these criminals came along and started copying your stuff making a fortune selling it. But these laws have been perverted and twisted to protect the big publishers, and to allow them to monopolize these industries.
Supply and demand is not a one way street. If there is no demand, the value of your product goes down.
Traditional retail got turned on it head long ago. Back in the day a retailer like Sears (bankrupt and sold to a competitor) would buy a large quantity of a product and put it in it's annual catalog at a fixed price for that year. That worked for them when there was little to competition, people had no choice but to pay the catalog price.
Sam Walton (founder of Walmart) told them they could be making a lot more money if they weren't so rigid on their pricing, but they didn't listen to him. Sam started Walmart with the rollback pricing philosophy. Start selling at high prices and make profits, but keep lowering the price to attract new customers to buy. Rollback pricing makes it possible for more people to be able to buy. Those who have to have it now, pay full price when it comes out. Those who are willing to wait a while, can buy it for less than Sam paid for it. Yes I said, less than Sam paid. Roll back pricing goes all the way down to one cent.
You might be asking how can Walmart make money if they sell stuff for less than what they paid for it. It's the secret of Walmart's success, and it's what Made Sam the richest man in the world.
If you buy 10,000 units @ $1 each and you start selling them @ $4 each, you've already more than doubled your money when you've sold half the quantity in inventory. You could sell the remaining units for a penny and it would still be a profit.
Where Sears failed was being greedy, trying to make as much money as possible off each and every one.
If it's sitting on a shelf, it's not making money. If cash is sitting in your wallet, it's not making money.
You can't put a fixed value on a product, and say "this" is what it's worth. If you do and the public doesn't agree, you'll have a warehouse of shit that doesn't sell, taking up space. Are you going to pay $79 on steam for a game, when you can buy it at Walmart or Amazon for $20?
Price is determined by demand. If you make a billion pizzas, you're screwed, if you don't have customers standing there.
The Digital goods era is no different. It's not making you money if nobody is buying. If nobody knows you make a game, your game is worthless. Your billion copies of the game sitting on your server aren't moving, if nobody ever sees them, and advertising costs a fortune. Pirates are giving you advertising... it's not free, there's some cost associated, but the benefits far outweigh those costs. Millions of people see your product. This is advertising that you can't even get in a market that's monopolized by big publishing companies, pirating your game is the only way to be seen at all.
If you made "pizzas for the homeless" and gave them to homeless people, in addition to your regular "for profit pizza" business. People who buy your pizzas know that they are paying a little extra to pay for the cost to make those pizzas for the homeless, and they feel good about it. You're a hero, for giving back to the community, feeding the homeless.
The same goes for "games for the homeless" you make money from patreon, from your for profit customers, and those customers give a little extra because you're doing a good deed, giving back to the community, giving games to poor people who can't afford them. You get credit for being a hero, and it doesn't cost you anything. You don't have to buy the pizza ingredients, pay for the gas to run the ovens, or all the pizza topping.... the pirates are doing all the work.
If you're stuffing your face with free games, say "thank you" don't bite the hand that feeds you saying "I don't like anchovies on that game" go grab a game with no anchovies.