Today, Spencer said, Microsoft gives people choice in how much they'd like to spend if they want consoles. The company offers the $499 Xbox Series X and the less powerful $299 Xbox Series S. Microsoft subsidizes the cost to the tune of $100 to $200 per console, with the expectation that it will make the money back on sales of accessories and storefront purchases, he said. It's up to gamers if they'd like to pay $10 or $15 per month for Game Pass subscriptions. They can also buy games outright, or play certain games for free.
Spencer said he doesn't think Microsoft will be able to keep the prices of games constant forever. But they can provide impressive amounts of entertainment in comparison with other pursuits. "People can play video games for hundreds of hours," he said.
Microsoft's Phil Spencer: Gaming 'Somewhat Resilient' to Weak Economy
That's a big loss on hardware.
Also seems to confirm that he was specifically talking about the price of games when he mentioned about increasing prices.