The loss leader will need to incorporate buying market share (primary motivator) so that the audience buy Sony games over the life of the platform (especially if there are cross-platform games).
If Sony makes $40 on a game, then it isn't unreasonable to take a hit like $200 (five game), AS LONG AS the projected sales figures indicate overall revenue to compensate over the life of the platfrom (what is that? 5 years).
I'm sure it certainly isn't their first choice, but if M$ wasn't a big, scary competitor in their rearview, then we surely wouldn't be seeing such a great deal from a company so large and able to do it in the first place.