The level of subsidization has nothing to do with hardware customization. You can have subsidized retail hardware or customized hardware sold at cost. They both went from high end heavily subsidized hardware to mid-range minimally subsidized hardware at the exact same time. Colluding in this way means they both dramatically increase their profit margins, and obviously does not preclude competition in other aspects.

Though they are also overtly colluding in other areas. For instance console exclusives used to be a major selling point, but they greatly empower studios to the consoles manufacturers detriment. The PS1 and PS2 had around 500 exclusive titles each. By the PS3 we're down to 174, 49 for the PS4 and now we're down to 26 in the PS5 era. Microsoft trends similarly and it was a strategic decision, to the point that they made a big announcement recently about returning to exclusives. As if the idea of having a competitive edge is some novel or revolutionary concept.