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1) Stardock is successful because they've managed to keep their development costs down to reasonable levels and they are targeting a niche market. Their sales figures (~300,000 for GC2 last I checked) map well for a game with a $1-1.5M budget.
2) The current tactic (limiting simultaneous installs) has been having an affect on casual piracy, which is all that any copy protection system can hope to affect.
3) The other current tactic (executable must be downloaded from the activation servers on install) is the same system that Steam uses and does one major thing for game developers...it stops pre-release piracy.
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