Baron,
I don't really think the profit from selling the console is all that great compared to the games themselves, although I could be wrong about that. I am pretty sure the margins are much lower on the consoles, and couple that with the fact that for each console you might typiclaly buy a dozen or more games. But one thing I am fairly certain of is that profits from sales of consoles is not going to be a factor for a company like EA trying to decide whether or not to put their resources into a console game or a PC game since they don't sell consoles.
But your point about piracy is certainly a factor I am sure. Think about what happens if you are at your buddies house and try this great new console game he bought. What do you do? You go buy one yourself. But if it's a great new PC game instead?
"Hey man, great game. Burn me a copy will ya?" 