Most consoles in Portugal, and I'm guessing this is true for the rest of Europe, are modded to allow to play pirated games. I think the piracy issue, like everything video gaming related, have always been looked at from an overly American perspective. Most publishers seem to talk like the American market is the only that exists.
Also, from my experience, as far as console gaming is concerned, there are two main types of console gamers in Portugal: people who pirate everything they play; and people who know one guy who owns a lot of games, legally or illegally, and lends those games to everyone else. these two groups compose almost all console hardcore gamers.
One other observation, is about the people that actually buy games but aren't hardcore. These people buy football games, movie tie in games, party games, and military shooters. They generally buy nothing else.