They've been burned since the NES. The piracy cat and mouse game is as old as consoles.
This apparently was a small motivator in the development in the japan-only Famicom Disk System, a floppy-disc-like drive addon, which did use a protection system that amusingly was based around trademark law. There was a number of other interesting elements about the Disk System, but I'll suppress my desire to vg history ramble :)
These days they have mostly won through DRM and tying in online multiplayer which can not be pirated.