Sony can get a far larger discount since their console sells 100 million+ while Xbox is half of that. Sony also has the funds easily to eat a loss: they've been making billions of profit every year (far more than Xbox) and have far higher software sales, subscription sales and 1st party sales. 

Xbox Series X as its price is going to be insane unless MS plan on making a huge loss.
I see Sony not aiming for a better return on the console sales.

Next gen, everyone starts at 0.

Haha, so... that's not how it works. And no way in hell you're going to convince me Sony has more money to burn than freaking Microsoft. As of last year the top companies with the most cash in hand, the top of that list is Microsoft followed by Berkshire Hathaway...Sony is nowhere to be seen on this list. Sony can eat a loss, but it'll hurt them way more than it'll hurt Microsoft. 

It depends on how you look at it can MS take a hit the answers overwhelmingly yes but if you say Xbox division without MS management doing the bail out things change to a maybe depending on how large a cut,the other MS divisions and some shareholders have had an history of complaining about subsidizing the games division, so taking the aforementioned into account, the most likely scenario is when they decide on 12 flops they factored in the cost against their own budget and are confident that the bottom line  impact can be sustained by sensible pricing and their income streams until costs come done. 

MS aren't going to burn all that money on a business that makes them a fraction of the money. By this insane logic, Google and MS would win at every market they compete in as they can burn so much more money.

Meanwhile, back in reality, MS and Google have been beaten and bowed out of so many ventures by far smaller companies. 

Also, that is how it works. Manufacturing basics, or even as a consumer you should know this: if you order in larger bulks you can get larger discounts.

Sony has a console that sells 100 million while MS is declining and selling 50 million. Sony is going to get the better deal from AMD.

The original Xbox ate $100 per unit just to get the console/brand off the ground. O suspect Microsoft will do that again in hopes of recouping via be subscriptions.

They also tried a subscription system by similar to mobile phones with the Xbox 360. It wasn't really widespread, though. Really just a test run.

I'm willing to bet Microsoft tries one if not both of these options to make the console more appealing to consumers. A $1000 mobile phone is easier to swallow at $30 a month. A console would be as well.

Bruh...just stop. You're missing the plot entirely. 

I bet Xbox based on Microsifts need to strengthen the brand and subscription, I think they're willing to take a hit. Then again I'm sure Sony can surprise me.

With both systems being considered nonessential due a longer cross over period I think premium $499 boxes are fair prices and if both are aiming fir that it could be a tie spec wise. Sony could potentially deliver a more effective machine even if the Flops aren't as high & vice versa. But my first suspicion is Xbox is slightly more powerful.

Declining? Like PS2 (155 mil) to PS3 (90 mil), right?