Lila Boffins said:...$900 dollars to make, so how could they sell it for only 399? ...
Because thats the initial costs - when sales start rolling production costs fall drastically. Sony probably makes a PS2 for $20 nowadays.
Besides - they make their money with other things - not the platform.
Basically like when you sign up for a cellphone contract and get the phone for free or $1 - they cost more than that too but the companies get their money through the monthly services/ bills.