Should I believe this threat? What's the worst that could happen?

I was playing mw2 and this guy said I sucked so I sent him a sarcastic message. He sent me 1 back and I sent another sarcastic one back and he said something then he "ps your ip address is being flooded". He said I won't be able to play xbox for a month. Idc about that I just don't want anything to happen to the computer or the xbox permanently. He wants 1600 pts ($20) by Sundayor else he'll do it. He has a site advancedgamingmodz.webs.com. Should I believe him? My computer has firewall n stuff but I don't know what to do.