No doubt it impact sales... but no where near as much as the industry wants you to believe. Most of those sale would not have occured within the first place because the person doing the download either does not have the mean or the desire to go out an purchase the game.
There is a phrase my friend like to use to justify his gaming habit (aka piracy). I will buy the game that I think are worth a purchase and download the one that are not.
In developing country it's even more obvious, who has the resource to purchase legitimate games when people have problem keeping the family cloth and fed? In many cases its not even possible to get those games / console through the correct channel, and overall economy (piracy) is the only way they can afford a luxury like gaming.
A girl friend from China once asked me what the 'tray' on the back of her PSP is for, she genuinely does not know that the UMD reader is actually use to play game, she thought they were all 'free' once you bought the system and was amaze that was not the case.
These are the type of people (and they are the majority) who will never buy the game regardless of the ability to pirate.
