Is it worth hounding your "friend" over it and reporting him to the authorities who literally could not give a shit? Not really. The best answer imo is to educate him on the great alternatives out there and maybe on the consequences of his actions, not act like a dick.
To the pirates: If you're using the "legal definition" as an excuse to be a scumbag because "nobody gets hurt", you need to know that you're still a scumbag (who steals stuff) and you don't deserve to be trusted.
Legal definitions aside. You don't turn them into the authorities, because you're right, the authorities don't care about the little guy pirating games off torrents. and you don't actually want your friend to get in trouble anyway, you just want them to stop pirating games.
For the OP:
If he really is your friend, then yea, I think you do hound him about it. If you actually care about your friend then it's your job to let him know he's fucking up. If he disagrees about it then maybe it's time to re-evaluate who you are friends with. Do you really want to be friends with someone who thinks it's okay to be a scumbag?
Fixed that for you.Spoken like someone without any scumbags for friends.