"The quality of a blu-ray over a normal DVD is immense."
One with a proper transfer is, at least.
However, Sony may not be losing BD money on the royalties from disc sales but rather from hardware sales. DVD players got replaced because newer ones got extra features like HD upscaling, but BD started out with everything users could need and apart from adding 3D - which is a niche market - it hasn't gone anywhere since. I've had my current BD player for almost four years now and nothing has come out since that improves on it.
Sony are also hampered a little by their own success with the PS3 and PS4. If you bought a Sony console you already have a 3D-capable BD player. I don't know if the Playstations are still being sold as loss leaders, but if they are then Sony are undercutting their own dedicated hardware.