Actually I think piracy is a major factor in consoles taking command of sales
Developers have intentionally put more of their effort into consoles because they know it's less viable to crack console games. In the same way developers have put more effort into multiplayer
I agree kind of. The games market is migrating away from one base (PC) to other bases (consoles) in the same way that it moved from the NES to the SNES, from the ZX Spectrum to the Atari ST, from the ST to the Amiga, from the Amiga to the PC, for much the same reasons, technology is evolving, and the way that developers sell their games to consumers is evolving. Previously at other stages people threw their metaphorical arms in the air and said "the games market is dying, look at these sales figures" they were all wrong too.
It's not piracy that's driving this evolution, though piracy is a factor, it's technology. Pirates have adapted to the new technology much faster, whatever you think about piracy the fact remains that anyone can log into PirateBay or use Google to find torrents of nearly any recently commercially released game, music CD, movie, eBook what have you and grab a copy for free with almost zero risk of prosecution.
Most people are more than happy to steal stuff if they think they can get away with it, and if they don't think it hurts anyoone really. Whether it's pilfering stationary supplies from your office, pulling a sickie at work after a night out on the town, fiddling your expenses claim to get a free lunch, or a few extra fuel miles, or someone to
clean your personal moat at the taxpayers expense, as a serious crime illegal downloading is on a par with stuff like that. That doesn't make it right of course, no matter what situation you are in.
The music/film/game industry is adapting to the new market, we have stuff like spotify, netflix, iTunes, Steam, games like WOW adopting a subscription model as an alternative to off the shelf sales.
This generation of games consoles does more than help defeat piracy for developers. It provides every user with a standard interface, most of them are based around PC architecture inside, which makes developing games easy, and all you have to do to play the game is insert the disc.
How bad Piracy is for games/music etc comes down to one equation really.
How many sales does a distributer lose because of illegal piracy?
How many sales does a distributor gain because of illegal piracy?
Is the loss bigger than the gain?
I'd argue that it about evens itself out else developers/distriutors would be a lot more proactive in pursuing and prosecuting downloaders.