I suspected the reason to be cheaper manufacturing costs as well but I'm quite surprised that royalties from selling 1.537 billion PS2 games versus 0.962 billion PS1 games (link) didn't put PS2 on top.
The PS2 was sold at a bigger loss per unit at launch than the PS1, plus Sony was more aggressive with price cuts. In early 2002 Sony was under no pressure from the Xbox and GC, but they cut the PS2 price by $100 in May anyway. I assume that Sony wanted to force the other competitors out of the market too after Sega had already bitten the dust a bit earlier, hence the aggressive strategy.
Another factor that has not come up yet is that the PSP launched during the tail end of the PS2 era, so the losses that the PSP incurred during its early going (the hardware was sold at a loss) hurt the PS2 with the used methodology in that graph.