I wanted to expand a bit further on my idea above, that piracy can't be stopped, nor is any DRM worth the hit to public goodwill, so instead I would propose a different business model entirely.
"Everything is worth what it's purchaser will pay for it"
1) Vanilla LT is put up for sale on steam at $30, a somewhat typical price for indie games.
2) Vanilla LT can be downloaded for free on the LT website, but is placed in the "Content Creator's" Section, and requires a login, and is coupled with some modding tools and documentation.
3) Vanilla LT is put up on torrenting/pirate sites by Josh, but this version has a splash screen with links to paypal, patreon, and the LT modding section, along with the message
We all like free things, but this game took a lot of work, time, blood, sweat, tears, and love to make. If you like it, please support us so we can continue making great games for you to play.
*Links to paypal, patreon, etc*
If you really just don't have the money, please contribute in other ways. We'd love to see the great mods you can make! We'll even show you how to get started!
*Link to Forums/Mod wiki*
-Thanks, Josh Parnell
The idea behind this approach is that it satisfies everyone. For people just looking to get a cool game, but uninterested or too lazy to join the community, they can buy it on steam like any other game. For people who like to pirate, it gives them the game in a "Pay what you want" format where those who weren't going to pay you anyways can at least have an official version they can be confident wont come with a virus or other malware. And in my experience, while some people are true misers, asking people to pay what they feel something is worth to them usually results in them giving you more than you would have asked in the first place.
But most importantly, this model encourages modding and content creation by the players, their additions expanding the appeal of the game. Looking at the examples of Paradox and Bethesda, modding has been critical to the popularity of their games. Letting the community pour their passion and talent into making the games better at no cost to the developers is great for public goodwill and is a pretty good business decision as well.
LT's development was paid for by 5500 people that wanted to enable an unproven young developer with a minimal portfolio, but with a basic tech demo and lots of enthusiasm to pursue his dream. LT doesn't need to pay off debts accrued in development because it was fully funded from the beginning. This allows it the freedom to be free.
The approach of
"Look at this cool thing I made, a tool that lets you make really cool games that look great all by yourself! Here try it! If you like it, feel free to show your support. If you just want to create cool games with it, that's great too! If you just want to have fun, then here, enjoy!"
Is more Community than Commercial, and stands in stark contrast to the micro-transactions and paid-mods that are so prevalent and so widely hated. It's more Wikipedia and less Photoshop (How many fewer digital artists would there be today if Photoshop hadn't been so widely pirated for the past 15 years?) Not to mention putting this game in the hands of countless future and undiscovered developers, setting a new standard for how games can be made.
So in short, how do you combat piracy? You treat people and their varied budgets with respect and accept alternative forms of support beyond money, and just accept the fact that some people wouldn't have given you a penny anyways, but at least you can maybe get their respect/admiration that you allow them to enjoy the product of your hard work anyways. The solution isn't technological, it's psychological.