Xbox sales might not rise at all. You have to wonder where those banned consoles end up. A used console sale is nearly the same as a lost new console sale
Its either you get banned from live or you get RROD. At some point ppl will just say screw this and get a ps3. Once the ps3 is hacked the field will be even, piracy will no longer be a reason to stick to a specific platform.
Big assumption there. plus the elite is not 199...Do you know how many money they lose because of pirates? Yes they can ban your 199$ elite for just 4 games (200$) or 50 games (2500$).
The 4 games is a bit more believable. Thats about the number of games you would need to have bought to use up the same cash as a replacement 360. Its a weird trade off. If you bought those 4 games and you lost your 360 then you are at a loss... but if you pirated those 4 games and lost your 360 its easy to replace the 360 and continue gaming.