SCEA and SCEE should look at Japanese studios as examples. AAA games for handheld doesn't need high budgets to make, even USD 1 mil is enough. Look at JRPG's, their budgets are average $500k-800k (or less) and they don't need 1 million sales to get profit. Lets say the game is $39.99, they only need at least 40k sales and they could get $1.6 mil, enough to create sequels or new ip.
But this is just my roughly estimation, but you get the idea :)