two points here:
Firstly, he probably isn't mad enough to think they would have all bought. but assume piracy is only 10 times not 20, and that 1 in ten would have bought, that means DOUBLE the sales, which is likely 5 times the profit 9at least). That's a BIG deal to ANY business.
Secondly, if you can get your games for free, then you tend to spend more money on other stuff. Pirates who suddenly couldn't get free games *would* buy more games, they would make cutbacks on other stuff, fancy new mobile phones, beer, whatever. They might not buy as much as they pirated, but to suggest they wouldn't buy games at all is just mad. People don't buy a PC that can play crysis, then refuse to play games if they need to open their wallet for them, as World of Warcraft shows.