mccp got here first with the essential argument, but let me expand a little by re-using an argument I made a little while back.
Consider your favourite purveyor of cakes and sweets. You visit, look around at a particular cake and think that it would be rather tasty. Then you notice the price and think that, whilst it looks tasty, it's just too expensive. You realise that you could make it yourself so you go home and do just that, trying to make it look like the cake you saw. You're quite pleased with the result.
A month later you're arrested for cake piracy because you caused the cake shop to lose a sale by not buying the cake and making your own instead. You're fined for the potential losses the cake shop suffered in addition, as you shared the cake with some friends.
Ok the analogy isn't perfect but it should demonstrate the complete idiocy of the "lost sales" argument. Lost sales are a fallacy: if the means of duplication didn't exist, those sales still wouldn't have been made, because the price is beyond the means of people who resort to piracy. If cake ingredients were banned then the cake still wouldn't be sold because it's priced at a level the market can't bear - and if it's priced so high nobody buys it, then it's actually worthless.
The solution is actually quite simple: reduce the price. They probably don't have to go too low to generate much greater sales. They might even turn a bigger profit.