Think about it like this, Microsoft entered console development knowing they would most likely take a loss on the original Xbox, now they are sitting pretty this gen. Basically, their model was "throw money at it until it becomes profitable." That's exactly what S-E is doing right now. They may be losing money (we really don't know), but PS3 release will sell copies, and coupled with subscription fees, will allow them to be very profitable even with a small userbase. You're just not looking at the big picture.