Sony took a loss on PS4 sales: https://www.forbes.com/sites/erikkain/2013/09/20/sony-to-tak...

This is normal.

The price increase would not have been mild - at the time this was written, it was the cost of a full game. When most only own a handful of games that's a significant difference.

This is more of an anecdote as someone already linked the PS4 example, but: Sony lost on each sale of the PS3, sometimes a lot ($300 on launch), for years. After 4 years, they still lost around $18 per unit lost[1]. It was a costly bet that ended up not working out for them as the PS3 continued to be expensive to manufacture, while also being too complicated to program effectively. (Worse ports, perceived lower performance due to SMT differences compared to the 360, etc.)

[1] https://www.cnet.com/news/sony-still-losing-on-every-playsta...