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MrChaos said:

Well Sony has no problem doing that and anyone who buys an X1 is not buying it over the PS4 as they most likely already have a PS4. MS is the one fighting an uphill battle.The money is lost from the cost of development and they will lose a lot and keep bleeding no matter how many units that put into homes.Look at the 360.Sold a lot,but made no profit.Also the people who buy it may not keep it or don't use it because they have a PS4.Why play games on X1 other than a few exclusives if the game is also on the PS4?

Nah, it's likely that both MS and Sony have already reduced the BoM costs for both machines, and if I'm not mistaken, isuppli put the PS4's BoM at $381, and the XB1's at $471 (I'm not mistaken, I looked it up, hence the exact figures hehe).  So, they were both profitable (albeit by a slim margin) from day 1.  This gen was never a repeat of the PS3, where Sony was losing ~$241.35-$306.85 per machine sold, at launch.  So, both companies can certainly afford to drop the prices a bit, esp. to entice consumers for the holiday rush.