I get all my games hand delivered to me. No way am I paying that same price for a digital download of the game.

Well, Ninty was bragging about how much money they have made, and ninty fanboys always said Ninty won the 7th gen because they have made much more than the others... and when Sony gives you more than 2k worth of games for "free" (while you have PS+) not sure how much you expect to be just to keep the network going... but let's say that by the numbers we know (30 dollars per game sold goes to the dev/pub) then 30 dollars of it would be for Network costs... that would be more than the possible profit or maintenance cost of PS+ (since they have to pay for the deals)... so it still doesn't make sense to say that they don't eat the difference and abuse their base.

First and foremost, we are all speculating here. It's impossible to know how they work without someone working inside.

Now, who is to say that Sony, MS or Nintendo are losing that much money by giving games free or super cheap? If that were always the case Steam would be in bankruptcy by now. Most companies work with complex algorithms to determine how much money they will lose or if they are losing any. When you see stuff like 30% sale or whatever, the company isn't always losing money, in fact in some cases, they are still making profit.

As for Nintendo making more profit than Sony and MS, that's true for the gaming division, but both MS and Sony have waaaay more money than Nintendo in general, so again, Nintendo doesn't have the luxury of throwing cash at free games like Sony and MS, and if Nintendo throws that cash into free games, they would be losing more money than they are losing now with the Wii U.

Also where are you taking those $30 from? The publishers gets it's money whether is a digital or physical game, that part is the same in both cases, same as what the developer gets. The difference are in the retailer margin and cost of good, which is in total $19 per game. That's the money that goes into the network and it's maintenance, whether that's enough or not is impossible to say.  

The 30 dollars I was taking as the money the pub will get after taking out the costs to send, seller margins and etc... but even tough if we say 19 dolars and the devs/platholders get 41... I still don't see how Sony with PS+ giving free games (that yes its calculated, I just said that when they give more than 2000 dolars in value for a 50 fee) they are probably having less than 19 for maitenance/profit... So I'm sure that Nintendo selling for 40 would still profit and keep their network running if not them Steam, MS and Sony would have gone under.