That is a really, really stunning thing to say (I have another word for it in my mind but we'll stay civilised). I don't know where you are living but at least in Europe (and my guess is pretty much everywhere), MS has lost a staggering amount of money if we look at the hardware only. My guess the total losses over the lifetime of the XBox could have reached anywhere from $2B to $4B.

Let's look at just a few problems:

1. XBox manufacturing. For the past few years (actually less than two years since launch), there hasn't been a week when you couldn't buy an XBox over here for around $199-$229 (and those usually have been bundles: 1-4 games, 3 months of free gamepass). There is NO WAY an XBox could ever have even been manufactured for less than that (I do not know what the store margins are/were for those units, but it's not $zero). Btw, XBoxes (not counting X1X, but that one actually required a complete redesign of the SoC, so add $80-100Mio here) are more expensive to manufacture than PS4s, judging by comparing motherboards). As a very rough guess, at the very least a $50 loss on every unit sold. For how many millions of units worldwide?

2. Kinect2. Kinect was and still is an engineering masterpiece, probably the best electronics device ever designed. It cost a shitton in r&D and to manufacture it (it has three special chips which require zero defects, and other top-notch components).  I have never understood why MS has never produced a standalone version of its Kinect2. There are a lot of researchers and probably photographers who would have bought such a device. If you tried to buy a tof chip, you'd still pay several times the price of the entire Kinect2, even today (actually a single tof chip with lesser resolution was in the $8000 region when Kinect2 hit the market. I remember the research group I was in once had around $50000 free to spend on equipment and the choice was between a tof system and a dye laser system (the boss bought the laser system). I'd estimate the manufacturing costs of the Kinect2 at around $200 simply by looking at all its components. Kinect2 was/is a high-end product, not a cheesy device like the original Kinect. This also puts to rest the myth that the $499 XBox was more expensive than the $399 PS4 - in reality, the XBox was much cheaper.

So let's make very rough guess what the Kinect2 fiasco cost for MS. Kinect2 was intended to go with every XBox sold, certainly 10mio chipsets were ordered for its first batch of units. How many were actually sold? 1 Million? 2 Million? Let's be generous and say 4 Million. That leaves 6 Million chipsets for the dump. Very roughly a $1B loss.

3. Software costs for the backwards compatibility program. That is an ongoing thing and I have no idea how large that group is that made the crossassembler/360os on XBox and fine-tunes it for every game they put on the gavel. Surely a few millions every year is spent on this.

4. There are more things that I keep wondering about, but probably not really hardware related. For example, how much does the XBox group pay the server group for using, maintaining, manning, upgrading, whatever else is involved, for the Azure server infrastructure all over the world. I have a sneaky suspicion that they have been freeloading on it, at least up to the point when Nadella made a few changes to the way things went up to that point. We will never know of course.

Phew, this rant has been much longer than I intended, but there are so many things thrown around in foums which are just plain wrong (other forums are even worse, though). One thing is absolutely sure though: On hardware, XBox is deep in the red.

I mean inflation is a thing...

I wouldn't mind a 499 USD (599 CAD) pricetag for the new Xbox (and PS5).

Yes, Sony might use the same excuses as you are, $500 is just to much and is an insult to their PS fans if they have an 9TF console, they must charge $400 if that is the case. I'm okey with $500 for 11TF, that would be great.

The cost of the retailer's profit, packaging, shipping, and paying the workers combined aren't just a few dollars, if Sony sell it at $400 - $450, then...

I would pay 700 EUR if it has good games but they need to focus on the mass,they might ask 449 EUR to sell it at a small loss and that would be best imo ?
Getting that bigger piece of the market at the start is important i do think.

Hmm i do not think it will be such a small price difference.

Putting two models of the ps5 so close to eachother pricewise would be confusing for consumers,atleast that is how a bussiness can look at it.

Indeed why would Sony risk it's own company existence with such a ridiculous low price,i would personally feel like a thief buying something like that.

Dude, the losses are irrelevant, Xbox series X will probably be a good amount more powerful than 9TF and I think it's unlikely Microsoft will charge above $500 as that would be a waste of time. Here's a list I made of verified insiders actually giving TF numbers for PS5:

Matt: 10.5TF+
BGs: 10.7-11.5TF
Jason Schreier: 10.7TF+
Heisenberg: 9.5TF or 11TF+
VFX_Veteran: 9TF
Klee: 12TF+

We have two 9TF in that list and Oberon with 9.2TF and Xbox series X likely at 12TF. Something around 11TF for $500 I think will be okey to compete will Xbox series X. They can't charge the same price as Microsoft if there's 9-12TF gap.

The PS one had a similar backlash, when people bought a console and a game but could not save the game because it also did not come with a memorycard, in the end it did not hurt, if stores explain that you need to get an (external) HD etc it will be fine.

Sony has stated with the PS2 that they will not sell consoles anymore at a loss (and that loading times will be extinct soon 'jax and daxter kind of did it') it is a lot of marketing and investors talk.

Explain how those TF's need to work together with other important components in the console and why you consider putting so much importance on that one thing,explain us what you know about the PS5 being a factual less powerfull console as a whole than the next gen xbox.

I question your knowledge on hardware to be able make the statements you do in a correct way.