I really don't disagree with your post in all, I don't disagree with your overall conclusion and the feeling you're getting a cross. But the part I quoted just doesn't make sense. Global sales aren't hard to gauge because they're tracked by the companies selling hardware/software and they show that outside of western countries and China, sales either are non existent because they don't sell there or smaller than the other countries. Also bootlegs don't really matter because whilst they exist, you're not outselling or anywhere near equalising the amount of legit games sold. They're also pretty much reserved to older games due to more advanced dmr and better platforms. As for the knockoff consoles, they're mostly from China where the Chinese video games market is bigger than the US one.
I mean, like I said I really don't disagree with your sentiment, but this pushback against the obvious fact that better video game sales in regions dominated by a single group of people mean that that group of people are therefore the ones playing the most is just bizarre to me. I don't get it, say it's irrelevant, sure, but to just deny it's a thing... I don't get it, it's like black magic to me, it makes no sense.
I argue against those numbers because they don't tell the full story. The majority population in an area should be the main consumers of your product. If they aren't something is wrong. If you made a game where US black people ages 14-35 were the main purchasers. You'd be wondering what is wrong. Why are the groups with 4-5 times as many people not buying your product? Conversely, a game with normal sales where white people were the main purchasers in the US doesn't mean black, latino, or asian people don't buy your game. Put you could look at percentages for each group. Then if you saw outlyers you could ask yourself why, and why aren't those people purchasing the game?
But the global yearly total sales on what people have spent on gaming isn't fully known. And bootlegs/knockoffs aren't just because of costs. As Gabe Newell has said "We think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem".
Look at Brazil for instance. The Sega Master System and Mega Drive are still sold there and people purchase the hardware and games. Why? Because due to import fees a modern console costs over a thousand US dollars there. Yet a company that partners with a local company to produce in Brazil can bypass those fees and sell for much less.
Now, look at emulation. People were doing it for years. But as soon as Nintendo brought out the NES/SNES Classis for $60/80. They flew off the shelves. It was a product people could buy, plug it into their TVs and just play. Something like that could be released in an official capacity to other regions where games just aren't being sold.
And in 2011 Gabe also said, "Prior to entering the Russian market, we were told that Russia was a waste of time because everyone would pirate our products. Russia is now about to become [Steam's] largest market in Europe". So while some other market might not be your largest, you could still be leaving a lot of money on the table by not trying to sell to people.
The reason the NES clones are popular is in the late 80s, a clone of the NES/Famicom was developed in Russia. It is extremely cheap to produce. So why don't any of the major companies create something like it but for newer gens? Release SNES, Playstation, and Playstation 2 official clones with bundles games. The software is a sunk cost, make the hardware and rack in some cash.