So, let's level set here. Amazon has never made money. Every single quarter, for 20 years they have lost money. The stock keeps going up as people see growth and leadership in all segments they touch. They will be the first trillion dollar company if they continue at this pace - and for them (now 'for us') there is so much space for growth.
So let me make clear, THEY DO NOT HAVE TO MAKE MONEY! They have to grow, they have to change things and they have to lead in all business segments they touch.
Now, let's see what happened once they announced the price drops - keep in mind this was just a PR release, nothing else happened, one 400 word press release. Amazon's stock price jumped 1.2% which added about 4 billion dollars to their market cap...
Walmart, Costco and others dropeed and about $12 billion was wiped out (in market capitalization) from our competition. To sum things up, that's 4 billions more for us to invest in price cutting, growth, etc. And it's $12 billions less for them to do the same thing...
That's your Amazon play right there... They take companies out of business with a PR release (remember Blue Apron), that's Amazon.... We just got lucky...