They make games, they just don’t make all the games. Similar like a grocery store having their own brands in the shelves, you don’t expect to be able to buy these at other shops.
And yes the upfront costs being subsidized is exactly the point.
I can only respond to what you actually said which was "Sony doesn’t actually make the games" and "they don’t have the kitchen nor the cooks".
Not quite. Grocery stores make common products and clones.
Sony’s 1st party stuff is (often) exceptional. It’s the reason an Xbox or PC isn’t a complete replacement.