If you think that’s scary wait til you hear about what it’s circumventing is capable of.

Wow, wait until you hear about the Intel Management Engine

Empress building a high end botnet?

I wouldn't touch this without air-gapping the machine it's run on. The funny thing here is that Denuvo can't do much to prevent this hack.

The HV is intentionally malicious and modifies the guest on the fly to archive the Denuvo hack. The hack requires to disable all major security protections in the victim OS, so the HV can more freely poke at the victim kernel. A jne-instruction to check if running under a compromised HV? It's now a nop-instruction.

The HV has access to everything that is plugged in physically, or run on top of it. In theory it e.g. extract encryption keys of https connections from any process in the guest.

Would running an os in a separate partition just for games mitigate the risks?

Well, you could potentially get a cheap office special PC to use as a guinea pig. (Depending on what it takes to run this software)

This is not scary at all. You must trust any code that you execute on your computer. Pirated games, if they were malicious, can already get whatever they want done on your computer, because you are giving it arbitrary code execution privileges. Fortunately there is a vast network of p2p and scene crackers that are trustworthy, who you can trust (even more so than some publishers) to respect your user rights.

The level of access hardly matters. If you were a malware developer masquerading as a legitimate cracker, there are many privilege escalation tricks you can use once you have any amount of access to a machine. And even if you didn't, the lowest level of access is typically enough to do financial crimes (stealing browser cookies to access your bank account, or ransoming your documents folder).

'Loss' due to piracy was always like 3%. It costs way more than that for this mess. They don't have to be good, just annoying enough to keep 97% of people paying.

Sure, it's always been a question of time, but Denuvo has been very effective for decades. There were very few people who were able or willing to crack Denuvo games before. Publishers really only cared about the initial release anyway, and after a few months, it wasn't worth paying for it anymore so they'd remove it from their games.

Not only has that always been the case, but that's the only possibility: DRM, on a fundamental level, is just encryption where Bob and Eve are the same person.

(For the uninitiated, the basic problem statement for cryptography is that Alice wants to send a message to Bob without Eve knowing what it says.)