One question:
How many people that play games on any given system, ONLY via emulators and downloaded games would go and buy the system if the free/illegal option weren't available?
I think this is the important question because I for example play GameBoy Advance games on my Xbox, but do not own a single GBA cart or unit. However, if there were no GBA emulator for Xbox I'd rather go without than pay for it. Playstation on the other hand, I do/will pay for, I have a nice collection of PSX games and will carry on buying them, even though I no longer use my actual Playstation, I only play PCSXbox.
Therefore, me using the GBA emulator isn't hurting anyone, becuase I don't think the games/console is worth paying for and given only the option of purchasing the GBA itself, Nintendo wouldn't get any of my money.
On the Flipside, Sony would get more money out of me if there was a PS2 emulator for Xbox, 'cuz I'd actually go and buy PS2 games, but I don't want to spend £170 on the console.
LA!
I like hearing people's views on this.