"Is it even worth that to barely beat out PS4 in America?"

In my opinion yes, I think MS are doing just the right thing and I think they should be even more aggressive. They can afford to take a financial hit to keep the brand name afloat and attractive. I would do just what they are doing and perhaps even more if I were in their position.

I would abandon Japan as a whole, that is just a waste of recourses and money. But I would still try to tie up time or full exclusivity with Japanese developers, especially games that are attractive in the west. And I would focus a lot more on Europe as a whole. Slash the price by half and set it as standard. Make some excuse that they have lowered the production costs so much that it is possible, we love our fans etc. And the same thing in US, slash the price by half as well, market the product even more aggressive and bundle it to death.

I would want to get as many X1 out in the market as possible and hope in the end that we could break even or end up with a small loss. I would think more of the value of the brand name for future generations and so forth than with the actual revenue we would make.

I think the most important now for MS is to keep the brand competitive and attractive, as they have already "lost" the race and can only choose two paths at the moment. Strengthen the brand name and take a financial hit and hope for a small loss, or weaken the brand name and try to break even or hope for a small financial gain. And the third, out of the question alternative, would be to do the same as Nintendo. Raise the price again to get financial gain and just ride out the generation and hope for brand loyalty.

who cares, really? it means cheaper consoles and games for gamers, both sides should be over the moon with the situation.

This deal only shows us that Amazon was overstocked and wanted to get rid of inventory and nothing more.