I'll put it this way. Look at credible studies on media piracy. (aka not ones that are just... they downloaded 10 copies that means we lost 600 dollars!)
You'll see that the results show their isn't a statistcal differnece from zero. In other words, piracy doesn't really effect media sales. While it lowers some peoples purchases who buy games... it also gets people who wouldn't buy games to buy hardware. It Also gets people who wouldn't buy games to buy hardware, get enthused about a medium they weren't as familiar with before and start buying the real product.
One Microsoft employee's model is "Don't pirate, but if you do pirate... pirate us." because they know if they aren't going to make a sale anyway it benfits them to have the pirates be used to their software.
