Sure, MS can. Xbox, however, can not. I think this is the reason we've been hearing lately that the PS5 is more powerful. MS is going to have a decent box, but they don't want to lose a bunch of money on HW, so I think they'll launch at break even, maybe a slight loss. Sony, on the other hand, is more willing to take larger losses up front, since gaming is a big division for them. Gaming for MS is a much smaller focus, and gaming HW even smaller, hence them taking a bigger leap into streaming and PC gaming, as of late.
I think the most likely outcome is that they will both launch at $499, but with Sony taking a larger loss, they will have the more capable HW.
Well it have been over 10 years that we have been hearing MS infinite money would win they a generation, it have been 3 loses already.
duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"
Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"