Around a fifth of pirated software contains pornography, claim anti-pirate software campaigners.
The Interactive Software Association of New Zealand yesterday staged a "disk demolition derby" in Auckland to highlight what it says is a growing piracy problem.
ISANZ estimates the gaming industry loses $20 million to $30 million to people illegally copying software.
In addition, it says the counterfeits often contains viruses and other problems that damage computers.
Some $300,000 worth of counterfeit games were steam rollered yesterday in Queen Elizabeth Square, watched by a crowd of around 100 people.
ISANZ executive officer Garth Wyllie says overseas software piracy is growing and in New Zealand there is the danger of organised crime moving into the industry, as happens overseas.
Around a third of pirated software comes from Asian countries like Malaysia, Indonesia and Taiwan. A third is also commercially copied in New Zealand, with the remainder being backyard friend-to-friend copying.
Wyllie says backyard copying is difficult to eliminate, but he claims recent success overseas.
A few weeks ago, his organisation succeeded in shutting down a Thai Web site that had 6,000 disks, which also resulted in them gaining the company list, containing 50 New Zealanders.
"We know in New Zealand who has been buying from that source. We are following them up and matching this with our existing information. If they are commercial sellers they can look forward to our calls," he says.
Overseas customers would also be reported to their respective policing forces abroad.
Wyllie says fines for pirates have tended to be "relatively minor", but the courts are increasingly viewing the matter more seriously. One recent case saw a firm fined $12,000.
Another nasty surprise, he says, is pirated software often contains pornography.
"We had the material (that we destroyed today) checked by police. Twenty-percent had some content of that nature," Wyllie says.
He also says genuine Sega games are black on the back and genuine Microsoft CDs contain a hologram.
If software prices were low, people also have to be wary, he adds.