The PC games are cheaper partly because of piracy, but PC games are also cheaper then Console games because of the license fee. The games in a sense subsidize the loss on the sale of the console. With PC's the manufacturer is in the business for a one time purchase and only incentive is to sell you accessories (printers, ink cartridges, productivity software, warranty plans, wifi routers, etc...)
The attach rate for both HD platforms probably has to equal about 7 games before the manufacturer begins making profit.
So how does used sales benefit consoles?
Since the majority of games that are sold back to stores are traded in as a form of payment because the cash value is usually about half, it encourages additional purchases. Many of these additional purchases come in the form as a new game sale, plus every time a used game is bought by a customer it gives the publisher an opportunity to sell more DLC and further increase the value of creating fans for future editions of the franchise.
Piracy is done more often then not as a trial system. What I mean is such as you saying I really want this new game that is out, but I really don't want to pay full price. So you either wait for the price to be what you think it should be or you just jump through some hoops and steal it. Right or wrong it is what it is. A good percentage of pirates wouldn't have bought the game at any price even if the legal cost was less then $5. But the majority of pirates will pay for the game if given the convenience of legal means and a fair price. This has been proven with services like Steam or even iTunes.
