The thing is....like with the Playstations and original Xbox, the fact you could play "backups" increased its popularity. Overall I agree its a bad thing but Im sure the companies cant deny it increased console sales.
Usually though the alledged backups are sold on or given away as pirate copies. As the Xbox costs more to make than they sell it for any profit comes from those games, in fact they have to sell games just to break even. So far Microsoft has made a loss on X-box every year, so much so that it wipes out the entire profit from their Leisure division and put it into debt. Any other company would have been wiped out or cut its losses. The 360 may mean that they can make a profit but only if the can prevent people using pirated games...
