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At first I thought it was too much, but if you calculate it and assume AAA games get twice as much money, the total cost over the year is comparable to the development costs of a flagship AAA game. And since more PS+ subscriptions are sold than games, they must be making a nice profit on top.

I dont think the AAA game would cost considerably more than indies because at the end of the day, big publishers would still get more from Sony's PS+ scheme for old games and it would serve the purpose of promoting sequels as well, so I wouldnt be surprised if there are cases where publishers agree to give it away at very low cost. Who knows... theres probably reverse auctions going on between publishers and Sony just to be on PS+.