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Carl2291 said:

This sounds like he is completely ignoring games sold on PSN.

With the games/DLC sold along with advertising, I'm sure they make the money back...

I doubt it.  In fact I bet PSN is the major reason their Networked division has been taking losses the last few quarters.

You would be amazed how much a service like this costs to keep running.  And as a free service, there are far more users on there that simply don't take advantage of the service.  Many simply have it because they can or to use just a few features.

With XBL Gold being the only way to get pretty much all the features of Live, it drives way more usage of the service and brings in more serious customers.