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The N64 was very profitable.

Sony aren't losing 3rd party support, they have just lost a lot of 3rd party exclusive support, there's a difference.

Not entirely true.  Some third party support, such as Ready at Dawn which made God of War: Chains of Olympus, has completely stopped developing for some Sony platforms.

Because the PS3 and 360 are approximately as powerful as each other and have approximately the same type of installed base right now, it generally makes sense to make the games cross platform, even if it wouldn't otherwise be profitable making a game for the PS3.  Porting is still relatively inexpensive.