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ConservagameR said:

This ^.  Also, the PS3 launch price was extremely generously subsidized by Sony considering the advanced hardware manufacturing cost.

What has PS ever done to get into MS dominated markets and cause them concern? The recent XB documentary shows MS was simply paranoid about what PS could become so they got into Sony dominated markets. Whatever concern PS seemed to be to them, no longer should've been a concern once PS4 was out, and yet XB now wants to gobble up that entire market with Game Pass.

Yep, for MS it was all about getting into the living room. They tried before with media center
https://www.cbsnews.com/news/microsoft-enters-the-living-room/
And were indeed afraid Sony would corner that segment with the extended media capabilities of the ps2.
PS3 vs X360 was not just about games, it was a battle for the home media center as well. HD-DVD vs Blu-Ray, which basically came down to VC-1 vs H.264, an MS owned codec vs a more open standard. We got some excellent media capabilities during that generation.

And yep, since the PS4, or rather since smart TVs took over, that whole concern is gone. So now it will be about getting gamepass / game streaming on smart tvs. Their Roku stick didn't work out yet (too expensive still), but TV and mobile is where gamepass can grow.