I know the game had a big budget and lots of money was spent on advertising, so did they actually make a profit?

Well if a games goes greatest hits, I think it's safe to say they made a profit.

Are you sure? Killzone had a massive budget, but I don't think it has met sales expectations...

Did Sony subsidize KZ2? I know Sony needed a marquee title to counter Halo.

That's what I was thinking as well. 

I'd take Heavenly Sword for example; it's one of PS3's eariliest games and yet it's still full price at retailers (at least in Canada) because Ninja Theory still hasn't made profit.

Well, it underperformed in my eyes - so I say no.

But that's just a wild guess... like most (if not all) the responses this thread will get.

i don't think greatest hits means anything about profit... lots of games make the platinum in europe and don't make the GH in america...
@OP they should have make their money back but if they didn't by now its not that bad since KZ3 is going to be released and the game engine almost for sure will be the one used in KZ2 with some updates so that will bring the dev cost for KZ3 way down, so if KZ3 sell as much or a little bit less than KZ2 that will ensure profits for GG...

yes they have, and as far as official advertising the game got one commercial that aired 1 day before the games release......... lotz of internet hype though

Not true. There's no connection like that. They don't drop price just because a game broke even.

I think so.