it's too late for M$ to bring in countermeasures - china is full of backups already, as many countries.
and, just look at MS stocks =) I rekon console sales boosted 200% after c4e/garyopa rls's. =)
so, maximum measure for them now is ban on live and putting new/unsusal PFI's, SS'es etc. Bring it on =) we have 3.0 now =))))
Yes but you have to remember that Microsoft sells consoles at a loss only to make up for the loss by making money on accessories (i.e. Controllers, HD-DvD, etc.) and publishing games!
If Piracy becomes too big of an issue they will take an agressive action because they will be losing a source of funds to make up for their loss on the consoles and in-turn will be not be turning a profit from their Gaming Division as a whole